TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 126

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SAME REASON THEY INSISTED THAT AN ELEMENT IN THE AGREEMENT SHOULD

SE PROLONGATION OF THE COMMUNITY'S AGREEMENT WITH HONG KONG ON

COTTON TEXTILES TO THE END OF 1974 SO THAT BOTH AGREEMENTS WOULD TERMINATE ON THE SAME DATE (BOTH AGREEMENTS BEING SUBJECT TO

REVISION IF A SATISFACTORY MULTILATERAL SOLUTION WAS REACHED REFORE THAT DATE). THIS WAS AGREED AND THE DRAFT DIRECTIVES AMENDED ACCORDINGLY.

3. THE 1

THE ITALIANS SUPPORTED THE FRENCH VIEW THAT THE COVERAGE SHOULD BE WIDE, AND ARGUED THAT THE CRITERIA FOR SENSITIVITY

SHOULD TAKE ACCOUNT OF FACTORS OTHER THAN THE COST OF IMPORTS.

THE DUTCH SUPPORTED THE GERMAN VIEW THAT THE SENSITIVE LIST SHOULD

BE SHORT AND CONSIST ONLY OF HIGHLY SENSITIVE PRODUCTS. BOTH OF THE LATTER SAID THEY COULD ACCEPT A DRAFT SENSITIVE LIST (CONSISTING OF 9 PRODUCTS) CIRCULATED BY THE COMMISSION (COPIES WITH HOPE).

4. WE AND THE DANES RAISED THE QUESTION OF OUR EXISTING BILATERAL AGREEMENTS WITH HONG KONG BOTH ON NON-COTTON AND COTTONS. WE ASKED WHETHER IT WAS AGREED, AS WE ASSUMED, THAT OUR TRADE WOULD CONTINUE TO BE GOVERNED BY OUR BILATERAL AGREEMENTS. WE RECEIVED

NO CLEAR ANSWER BUT THE COMMISSION SAID THEY WOULD STUDY THE

QUESTION.

5. CN THE QUESTION OF THE BASE YEARS FOR CALCULATION OF QUOTAS, THE UK, GERMANY, BENELUX AND THE DANES WERE IN FAVOUR OF USING 1971/72, WHILE THE FRENCH, ITALIANS AND IRISH FAVOURED 1970/71/72. THE GEPMANS ARGUED THAT IT WAS EXTREMELY IMPORTANT FOR THEM TO

TAKE A REALISTIC BASE PERIOD IN VIEW OF THE POSSIBLE INFLATIONARY

EFFECTS OF FIXING QUOTAS AT TOO LOW A LEVEL. WE STRONGLY SUPPORTED THIS STAND. THE SAME SPLIT OF OPINION WAS EVIDENT ON

CROWTH WITH THE UK, GERMANY, BENELUX AND DENMARK FAVOURING A 5% GROWTH FACTOR WHILE THE FRENCH WANTED NO GROWTH FACTOR AND THE

ITALIANS AND TRISH RESERVED THEIR POSITIONS.

6. THERE WAS SOME DISCUSSION OF THE PROPOSED SAFEGUARD CLAUSE

WHICH IT WAS AGREED SHOULD BE ON THE LINES OF THE SAFEGUARD CLAUSE

PROVIDED FOR IN REGULATION 1325. THE EXISTING QUANTITATIVE

RESTRICTIONS (IE, THOSE CURRENTLY, APPLIED BY FRANCE) WOULD BE

SUSPENDED FOR THE DURATION OF THE AGREEMENT, SUBJECT TO THE

APPLICATION OF THE SAFEGUARD CLAUSE IF IT PROVED NECESSARY.

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