TNAG-0241-FCO40-277-Agreements-under-GATT-long-term-arrangements-for-exporting-o-1970 — Page 76

Reference: GVA/1/2

CONFIDENTIAL

U.K. Mission,

37-39 rue de Vermont,

1202 Geneva,

Switzerland.

20 February 1970

Dear Commercial Department,

The GATT Long Term Arrangement on Cotton Textiles (LTA) is due to expire on 30 September this year but, following discussions in Geneva, it seems likely that it will be extended as it stands for a further three years, In the course of a meeting in Geneva before Christmas, however, importing (developed) countries gave undertakings that they would, in the course of bilateral discussions, endeavour to offer increased export opportunities and more flexible conditions to the countries exporting cotton textiles who are subject to restraint under the Arrangement.

2. In accordance with these undertakings a team of Hong Kong officials held preliminary talks with representatives of the Commission in Brussels in the last week of January to try to ascertain the conditions that the EEC would be likely to offer Hong Kong when the LTA is extended. These consultations are expected to be resumed in the latter part of March.

3.

In the course of the January discussions it became apparent that the Commission, at least, had formed a wrong impression of the growth of Hong Kong's exports of cotton' textiles to the Community in 1969, which they were assuming had been larger than was in fact the case. It could be that, on the basis of this assumption, the Commission has been recommending to the EEC Council of Ministers less favourable treatment for Hong Kong, particularly as regards growth in quotas, than it might otherwise have done. We know as a fact that an official of the Commission, who was present at the Hong Kong talks, subsequently put forward this view in Bonn. He also intimated that the Hong Kong officials had accepted this sort of offer as reasonable, which was the opposite of the case. In addition it would appear that the Council of Ministers themselves have given preliminary endorsement to figures for Hong Kong which would be relatively more unfavourable than the terms likely to be offered to other exporting countries.

4. HMG are anxious to do what they can to assist Hong Kong to obtain the best possible treatment for its exports of cotton textiles to EEC countries. To that end they are anxious that any misunderstandings which there might be, either in the Commission or in the Governments of individual Member States, as to the true size of Hong Kong's exports of cotton textiles to the EEC in 1969 should be cleared up. On the other hand they are also concerned that the present useful contacts we have made with Commission officials should not be prejudiced by any imputations that they have been deliberately misrepresenting

Commercial Department, British Embassy,

(all Member States of EC)

RECEIVED IN REGISTRY No.51

/the

281970

CONFIDENTIAL

HKK 6/16