*
CONFIDENTIAL
Internal Developments
5. Kittel was much exercised about the problem of keeping us in touch with Community internal developmen. during the negotiations. He contrasted the Dutch approach of always urging that the British should be formally consulted on emerging Community policies, which he regarded as much too cumbersome and liable to cause sharp conflict within the Community, with a more pragmatic, German approach. He said he was personally in favour of keeping in touch with us bilaterally; providing us with full information on Community developments; and asking us to make any comments back informally and bilaterally.
6.
He then instanced the question of the Medium Term Financial Support Facility which would be coming before the Council in the autumn. The Germans were currently arguing in favour of a ceiling not only on creditors' contributions but also on debitors' drawings within. the scheme. Other member states wanted no specific ceiling to drawings.. But was the German policy in the best interests of a Community of Ten? On this sort of question it would be helpful to have our views. He would propose to pass me a copy as soon as it was ready, of the Council working party report on this question (he thought it would be available next week). I said I would be happy to receive this. It would be an excellent way of keeping us abreast of Community thinking. But I could certainly not promise that we would wish to comment at this or any other stage. Kittel said he quite understood this.
UNCTAD Preferences
7.
We had a brief discussion on the UNCTAD Preference question and the problems of Hong Kong. Mueller-Thuns taxed us with not having been very helpful on the question of our textile offer. In reply to a question, Mueller-Thuns exphasised that even if the Community offer was only extended to the 77 in the first instance, this did not mean Hong Kong was being excluded. There would have to be some special arrangement worked out later for Hong Kong. In substance it would not be large, probably no more than the ideas which Di Martino had discussed earlier this year with Kemmis and which he gathered we regarded as derisory. I pointed out that there was an immediate, presentational shag to the way the Community policy was evolving; if they persisted, there was a risk that other donors would regard the Community as having excluded Hong Kong and would follow suit themselves. We and the Community would then be left holding the baby.
It was most important not to give the Americans and the Japanese this opening. Mueller-Thuns said he recognised the validity of this argument; it could perhaps be met if the Community brought forward its ideas on Hong Kong at an earlier date than had previously been envisaged.
James
(D.H.A. Manay)
14 September, 1970
Copy to:
J.A. Robinson, Bog
P. Hall, 53Q.,
G.
(2.0.0.) 0.0.) ormal o upade)
i
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