injury criteria being applied by the Sweden:
P cularly the use being made of defence policy and the refusal to recognise the effect of competing imports from other suppliers. With regard to roll-in, we would hope that your negotiators could confine themselves to an arrangement to be called a combined quota,which would be limited in each case to a single market and production item, such as woven dress shirts, where there was a damage case in the item taken as a whole with a falling market in the cotton area and a rising market in a directly competitive non-cotton fibre. We vo uld hope also that your negotiators could confine any agreement on swing either to the same criteria as set out for a combined quota above or, if they felt they had to bring in different market items,to items where there was in each and every case a reasonable damage case for restraint.
5.
Subject to paragraph 4 above, McEnery, who/we propose should attend the negotiations as white represen-
tative, will be authorised, should your negotiators wish to do a deal, to say that HMG will not stand in the way of any agreement accepted by the Hong Kong Government. However, for the record, he will go on to support any disagreement by you with the injury criteria used by the Swedes and to stress the importance attached by HMG to a proper regard for the principles
of Article XIX of the GATT. He could add if
necessary that HMG is taking this position to preserve the immediate interests of Hong Kong knowing that in practice the Swedish Government will not be able to
change their position until their Royal Commission on textiles has reported later this year. McEnery's statement would not specifically refer to any combined quotas or swing.
6. The above arrangements are envisaged as an emergency measure to deal with the immediate Swedish
situation and we hope that you see no fundamental
difficulty in them.
(11516) Dd.392077 300m 10/68 G.W.B.Ltd. Gp.863
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