TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 59

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LTA restraint arrangements for dealing with disruptive imports problem" approach.

the "comm (17.

(ii) As an extension of (i) -

to work out a suitable nogotiating position for an enlarged EEC and to bo ready to put on a surcharge à la US if disruption occurred.

(iii) to consider retrospective imposition of gr. on cottons for the year 1972 say in the middle of 1972 in preparation for the inclusion of the UK in the Community's restraint arrangements from the beginning of 1973, and to neutralise the effect of any forestalling.

(iv) to considor with the EEC the possibility of introducing combined ceilings for mmf and cotton of the Hong Kong "roll in" situation.

FURTHER STUDIES REQUIRED

All these four options would have a bearing on the CRE paper, which should be extended to include the following points:

(i) Art 19 action for both cottons end non-cottons: Which countries would bo

mainly affected (bearing in mind that action had to be non-discriminatory) what consultations would be needed, and what would be the cost in terms of compensation. (It was accepted that in the latter case Lancashire would have little to offer in the way of tariff concessions and that retaliatory action against UK exports was a strong possibility.) How quickly could we act in a situation of disruption or threatened disruption?

•

(ii) Implications of the EEC's UNCTAD GPS Offer:

This would need to be taken

into account when examining all the options both original and new.

(iii) The proposed GATT textile study: How would this fit in with the general

policy? (Hijzen had already indicated following his visit to US last week that he thought the study might be enough to contain industrial pressures within the Community.)

(iv) Implications under Art 19 of extording the country coverage of the cotton

textile quotas without introducing the tariff: If this were to apply to others beside the present global quota countries and the bilateral arrange- ments countries, what would be the position vis a vis EFTA low cost supplies and the developed commonwealth, USA and the EEC?

(b) Tariff Division would consider the administrative implications of all tho options in the submission.

(0)

CT and CRE Divisions would try to assess how far forestalling could be neutralised by retrospective imposition of q.r. on either cotton alone or combined cotton and mif in mid-1972.

(a) CT Division would bear in mind the implications of the probable roll forward by 1974 of the base year for the EEC's generalised preferenco sohere CRE3 have since advised that the most likely base year is 19717.

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