TNAG-0384-FCO40-430-Trade-relations-between-Hong-Kong-and-the-EEC-1973 — Page 131

Mr Hart

(EID)(E)

Reference

• X X C

97

PA

12.1X

{

TEXTILES: FUTURE ELC BILATERAL AGREEMENTS WITH THIRD COUNTRIES AND GSP

1.

I was asked to attend a meeting to discuss the DTI paper on this subject (Miss Lowne's minute of 6 September) on 10 September. Various sections of CRE and CT Division were

2.

present.

We discussed at length the pattern of the proposed agreements with third countries, in particular why the sum of the various quota limits should exceed the total EEC figure as a whole. Miss Lowne explained that the tables in column 9 represented 5% increase per year and she did not think the Community would agree to pitching 'them any higher. Hong Kong worked on a similar basis at present and she did not see that the arrangement would create any difficulty. It had the advantage too of giving each exporting country the choice of market for its products; to allocate fixed quotas to each importing country would not help towards 'the creation of a common market in textiles.

3. Under the system as set out in the draft paper, however, it was possible for importing countries to import less than at present. This was not the intention and Miss Lowne agreed to insert a sentence in the paper saying that it was not the intention that any country should cut its imports below present levels. This change would have the effect of enabling exporting countries to export the maximum figures to each importing country and so exceed the total given for the Community as a whole. In other words, the device would enable exporting countries to increase their exports by far more than 5%.

4.

Miss Lowne agreed that the reference in paragraph 6 of Appendix A to the need "to establish a wide product coverage" for super-competitive countries (Hong Kong) was a mistake. It was not intended that the range of controls should be extended to other products and the sentence is to be deleted.

5. As agreed with Hong Kong Department, I questi oned (repeatedly) how the present paper could tie in with the proposal to press other members of the Community to increase their quotas from Hong Kong as com- pensation for Hong Kong's exclusion from the GSP on textiles. After a great deal of discussion the meeting concluded that a proposal of this nature was just not possible. Other member states, and the Commission in particular, regarded Hong Kong as a

/super-power

DD 145177 219242 500M 4/73 GM 3643/2

}