TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 143

CONFIDENTIAL

(E) WE THEN HAD TO CONSIDER:

1) WHETHER THERE WAS A CASE FOR OFFICIAL INTERFERENCE IN THE

MARKET:

1) WHETHER THAT INTERFERENCE SHOULD BE UNILATERAL IN NATURE, HAVING REGARD TO THE PROVISIONS OF THE TREATY OF ROME WHICH WE UNDERSTAND RULES OUT A BILATERAL SOLUTION BETWEEN HK AND THE FRG:

(F) IN THE ABSENCE OF ANY EEC STATISTICS SHOWING RECENT MOVEMENTS OF TRADE AND WHAT IMPACT, IF ANY, HK'S EXPORTS OF NON-COTTONS WAS HAVING ON THE EEC'S TEXTILE INDUSTRY, THE HKG HAD NO ALTERNATIVE BUT TO TURN TO HK'S EXPORT LICENSING STATISTICS (WHICH ARE COMPLETELY UP-TO-DAY) TO DETERMINE:

THE MARKET OR MARKETS WITHIN THE EEC IMPORTING THE MAJOR PART

OF HK'S EXPORTS OF NON-COTTONS:

) THE PARTICULAR NON-COTTON TEXTILES BEING EXPORTED TO THE

MARKET OR MARKETS:

(G) THIS EXAMINATION SHOWED THAT THE BULK OF HK'S TEXTILES EXPORTS WERE SHIPPED TO THE FRG AND COMPRISED PRINCIPALLY WOVEN POLYESTER/COTTON GARMENTS WHICH COULD BE CONVENIENTLY GROUPED UNDER FIVE OF THE SIX SPECIFIC CATEGORIES OF THE HK/EEC COTTON TEXTILE AGREEMENT, AND THAT THOS E EXPORTS HAD INCREASED SIGNIFICANTLY OVER

THE PART YEAR:

(H) HAVING CONSIDERED THESE POINTS, WE DECIDED THAT, WHILST THERE MIGHT BE SHORT TERM DIFFICULTIES FOR SOME EXPORTERS AND IMPORTERS, IT WOULD BE IN HK'S LONGER TERM INTEREST TO INTRODUCE UNILATERAL

EXPORT RESTRAINT TO THE FRG.

) WE FURTHER DECIDED THAT IN THE ABSENCE OF ANY FORMAL REQUEST FOR CONSULTATIONS THERE WAS NO CASE FOR THE APPLICATION OF THE

ROLL-BACK FORMULA SET OUT IN ANNEX B TO THE LTA AND THAT THE ONLY REASONABLE REFERENCE PERIOD AND LEVEL OF TRADE FOR THE UNILATERAL RESTRAINT TO BE BASED ON WAS THE LEVEL OF OUR EXPORTS OF THESE

PRODUCTS IN THE YEAR 1972:

-2- CONFIDENTIAL

/(J) HAVING REGARD TO