FIFTH SESSION:
CONFIDENTIAL
FRIDAY 14 JANUARY 1972 10.45 AM (MILLBANK TOWER)
V
DISCUSSION AND ARITHMETICAL ANALYSIS OF THE
MODIFIED ALIGNMENT PROPOSAL
1 The Hong Kong side said they had formulated their original alignment proposal as part of a single, coherent pattern for agreements with the EEC. They therefore regarded HMG's modified version of it more as a straightforward modernisation of the present UK/Hong Kong arrangement than as alignment in the proper sense, even though HMMG's proposed package contained certain EEC-related elements. Because of this they were not prepared to withdraw their claims for "hardship" yardage or for further specific improvements to take account of their particular institutional situation. However, despite the difficulties of evaluating the modified proposal, they were prepared to take the risk of accepting it provided certain amendments were agreed.
2 Mr Ridley said the UK's reasons for the modification were that it was presentationally easier to phase the alignment both as regards Lancashire and our other suppliers. The real move towards an FEC-type of arrangement would come in 1973.
3 The two sides then agreed the final position in terms of Hong Kong's original proposal.
(a) Shifts within the aggregate
Group I Group II
no change
no change
Group III
no change
Group IV
Group V
(b) Categorisation
group limit to be increased by Group V
yardage ie 2.485m sq yds
deleted
Group I Group II Group IlI
no change
no change
Group IV
no change overall but *Category 9
cordumy limit to be increased from 274,867 sq yds to lm sq yds Categorisation converted to EEC system
plus specific limits for
gloves
2) towels
bed linen with sub-limit
for sheets
D2 of the
(c) Flexibility ("swing" provisions
((1) 100% downswing ex Group IV to Group III basket present heads( (2) 100% downswing ex Group IV to Group II basket
of agreement
E5 of the present heads of agreement New PROVISIONS?
(3) 100% downswing ex Group Ill to Group II basket (4) 5 "Creeping swing" (the 95% usage/5% growth formula)
10 upswing from Group III ceiling to Group IV ceiling 10% cross-swing between categories in Group IV only (Limited
CONFID
inwards)
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Private notes are available after approval.