TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 117

RESTRICTIONS ON HONG KONG'S EXPORTS OF NON-COTTON TEXTILES TO THE EEC: MEETING AT DTI 12 MARCH 1973

Present:

Miss L L Lowne DTI (CT) Mr D M J Gwinnell DTI (CT)

Mr DJ C Jones Hong Kong Government Mr DM Sellers

Mr AC Stuart

11

11

(London)

FCO (Hong Kong & Indian Ocean Dept) DTI (CRE2)

Miss C H Welch Mr R P Hope

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(CT)

Mr P W Ridley (Head CT) joined the meeting at a late stage.

The meeting was requested by Hong Kong Government officials, who were disturbed at the report of the Brussels textile working group meeting of 22 February contained in UKREP Brussels tel no 988 to FCO.

Mr Jones asked why the pressure to grant a mandate to the Commission to negotiate on a Community basis had been irresistible. He advanced a number of arguments, notably the lack of free circulation within the Community, which could have been used to oppose this pressure. Miss Lowne explained that the apparent alternative - bilateral negotiations between Hong Kong and Benelux - had been ruled "illegal and impossible" by the Belgian chairman. But it was not absolutely clear that a "solution on a Community basis" would mean ceilings for all nine Member States; Denmark and the UK had insisted that their

own existing arrangements - comprehensive for polyester cotton cloth and made-ups in our case, but confined to a single garment category for Denmark - were satisfactory and should continue.

In discussion of the three or four items for the mandate referred back to capitals, Miss Lowne suggested that the line we would take in the meeting on 16 March would in practice coincide with the best interests of Hong Kong. Mr Stuart also thought that there was no difference between what Hong Kong and the UK wanted, ie limited, justifiable restraints. But Mr Jones felt that all kinds of arguments (eg on the question of base period, the LTA 3-month roll-back formula was itself less than an exporting country was entitled to under GATT rules and therefore gave the earliest possible base period that could be defended) should be deployed by the UK on behalf of Hong Kong in the meetings which discussed the terms of the mandate. In reply to DTI objections that such arguments were more appropriate to the negotiation itself, Mr Jones made the important point that EEC negotiating mandates were arrived at after such a painful and lengthy process of internal bargaining that Hong Kong would again be faced with the alternatives of agreeing to the EEC's terms as set out in the mandate, or having import restrictions imposed. There would be no real negotiation.

There was some discussion of roll-in between cottons and non-cottons. This had not been discussed in Brussels. In its unilateral action on exports to Germany Hong Kong had "awarded itrolf" 100% one-way roll-in from coticns into the half dozen restricted non-cotton itens.