TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 137

CONFIDENTIAL

RESTRAINT LIMITS,

ALTHOUGH WE ADMIT THAT MARKET DISRUPTION MAY EXIST AND MAY HAVE

BEEN CAUSED BY IMPORTS FROM HONG KONG, WE HAVE NOT BEEN GIVEN ANY

EVIDENCE OF THIS. WE THEREFORE SAW NO REASON FOR A CUT-BACK IN THE TRADE. THE LIMIT WE CHOSE (1972 EXPORTS) THEREFORE REFLECTS THE RECENT PATTERN OF TRADE. HOWEVER, ALTHOUGH WE DID NOT IMPOSE RESTRAINT UNTIL THIS MONTH, WE ARE DEBITING ALL SHIPMENTS SINCE 1

JANUARY 1973 TO THE LIMITS WE HAVE ESTABLISHED.

PERIOD OF RESTRAINT.

WE HAVE MADE THE RESTRAINT CO-TERMINOUS WITH THE EXISTING WK/EEC COTTON TEXTILES AGREEMENT. WHILE WE SHOULD BE PREPARED ON

REQUEST TO CONSIDER AN ARRANGEMENT COVERING A LONGER PERIOD, IT DID NOT SEEM APPROPRIATE THAT A TEMPORARY ARRANGEMENT, WHICH IS NOT A NEGOTIATED AGREEMENT BUT A GOODWILL GESTURE, SHOULD COVER A LONGER

TERM.

'ALL GERMANY'S PROBLEMS '

*

WE CAN HARDLY TAKE ACCOUNT OF ALL GERMANY'S PROBLEMS WHEN COMMUNIY

REQUIREMENTS HAVE PREVENTED THESE PROBLEMS FROM BEING PUT TO US AND

PRECLUDE DIRECT BILATERAL NEGOTIATIONS. IN ANY CASE WE SHOULD

FIND IT DIFFICULT TO ACCEPT THAT IT WAS OUR RESPONSIBILITY TO

CONTRIBUTE TO SOLVING ALL GERMANY'S PROBLEMS, E.G. THEIR OSTPOLITIK

OBLIGATIONS.

RISK OF 'GERMANY IMPORTING MORE IN 1973 THAN IN 1972'.

THIS SUGGESTION IS RATHER SURPRISING, SINCE THE FIVE CATEGORIES

OF POLYESTER/COTTON GARMENTS, WHICH ACCOUNTED 96 PER CENT OF OUR M.M.F. GARMENT EXPORTS TO GERMANY IN 1972, WILL IN 1973 BE RESTRICTED TO THE 1972 LEVEL AND SINCE OUR ABANDONMENT OF THE OLD CONTROL OF COTTON EXPORTS SHOULD RESULT IN A CONSIDERABLE

DECREASE IN SUCH EXPORTS IN 1973.

GENERAL.

THE ACTION THAT WE HAVE TAKEN IS NOT MEANT TO BE A FINAL

SOLUTION OF WHATEVER PROBLEMS MAY EXIST. IT WAS UNDERTAKEN AS A

GOODWILL GESTURE, IN ACKNOWLEDGMENT OF THE POSSIBILITY THAT THE GERMANS MAY HAVE GENUINE CAUSE FOR CONCERN, AND IN ORDER TO GIVE

THE COMMUNITY THE TIME AND THE OPPORTUNITY TO FORMULATE A REASONABLE COMMON FOLICY, FREE FROM THE URGENCY IMPOSED BY THE GERMANS?

RECENT ATTITUDE.

CONFIDENTIAL

WE WOULD