TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 134

2. THE SECOND POINT IS THAT THERE SEEMS LITTLE CHANCE OF CUR. GETTING A DEROGATION FROM THE EXTENSION TO US (SUBJECT OF COURSE

TO RENECOTIATING THE QUANTITIES CONCERNED OF THE ARTICLE 4 AGREEMENTS OF THE COMMUNITY FOR THE LAST NINE MONTHS OF THEIR LIFE (JANUARY TO SEPTEMBER 1573). IF WE TRIED TO GET SUCH A

DEROGATION THE COMMISSION WOULD ADVISE STRONGLY AGAINST IT

FOR THE REASONS IN MY TELEGRAM UNDER REFERENCE. AND FOR PRECISELY THESE REASONS THEY WOULD BE SUPPORTED BY MOST IF KOT ALL OF THE

MEMBER STATES. INDEED THE ONLY PROBABLE RESULT OF SUCH AN ATTEMPT

ON OUR PART WOULD BE A PUBLIC ROW IN WHICH WE WOULD BE SEEN TO.BE PRESSED (AND PROBABLY HAVE TO ACCEPT) THE IPPOSITION BY US OF QUANTITATIVE RESTRICTIONS ON THE IMPORT OF COMMONWEALTH

TEXTILES. THIS WOULD CEVIOUSLY BE EXTREMELY AWKWARD POLITICALLY. 3. MY CONCLUSION IS THAT WE SHOULD QUIETLY ACCEPT THE APPLICATION TO US (SUBJECT TO RENEGOTIATION OF THE QUANTITIES) OF THE ARTICLE 4 AGREEMENTS FOR THE FIRST NINE MONTHS OF 1973, BUT THAT WE SHOULD SEEK TO AVOID ANY PUBLIC REFERENCE TO IT. THIS IS CLEARLY NOT AN IDEAL COURSE, BUT IN PRACTICE EVERYTHING WILL DEPEND ON THE QUANTATIVE LIMITS WE SHALL NEED TO AGREE WITH THE COMMUNITY IN 1972. ERNST 13 LATER DISCUSSION SHOWED HIMSELF WELL AWARE OF THE POLITICAL ODIUM WHICH THE COMMISSION

WOULD ATTRACT IF THEY TRIED TO SET THESE TOO LOW. AND HE POINTED SENSIBLY ENOUGH TO THE FACT THAT A LOT WOULD DEPEND ON THE COURSE OF CUR IMPORTS IN 1972, ON THE STATE THEN OF THE TEXTILE

INDUSTRIES IN THE ENLARGED COMMUNITY AND ON DEVELOPMENTS IN INTERNATIONAL TRADE IN TEXTILES. SO WE CANNOT NOW ASSUME THAT THE RESULT OF THESE DISCUSSIONS WITH THE COMMISSION IN 1972 WOULD BE TO SET UNREASONABLY LOW QUANTATATIVE LIMITS ON IMPORTS INTO THE U K. AND THE ALTERNATIVE OF A PUBLIC ROW NOW

SEEMS TO ME A GOOD DEAL WORSE.

4. AGAINST THIS BACKGROUND I THINK THE MINIMUM WE COULD GET

AWAY WITH ON COTTON TEXTILES IN CUR STATEMENT ON ADAPTATION TO THE G P S WOULD BE SOMETHING ON THE FOLLOWING LINES:

QUOTE THERE ARE OF COURSE CERTAIN PROBLEMS IN THE COTTON TEXTILE

FIELD ARISING FROIT THE FACT THAT CUR IMPORT REGIMES ARE SOME- WHAT DIFFERENT. BUT WE THINK THAT THESE PROBLEMS CAN BE DEALT - WITH WITHIN THE FRAMEWORK OF THE TECHNICAL ADAPTATIONS WHICH

WILL NEED TO BE MADE DURING 1973 TO ENABLE THE COMMUNITY'S GENERALISED PREFERENCE SCHEME TO BE APPLIED A DIX FROM 1 JANUARY

1974 UNQUOTE.

5. AS TO PROCEDURE, WE MIGHT CONSIDER GIVING A STATEMENT ON THESE

LIMES, INCORPORATING ALSO OUR PROPOSAL THAT WE SHOULD ADAPT TO THE COMMUNITY G P S ON 1 JANUARY 1974, IN CONFIDENCE TO THE PRESIDENCY AND THE COMMISSION EARLY NEXT WEEK (THUS AVOIDING

ANY CHARGE THAT WE DELAYED DEDULY GIVING THE COMMUNITY CUR