TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 190

TO THOSE

3 This situation incontestably creates a serious danger of market disruption in the Community. Moreover the Commission has recently received requests from certain members States for the introduction of urgent measures with regards to particular products originating in Hong Kong. Moreover the United Kingdom has recently negotiated with Hong Kong an agreement for voluntary restraints covering a fairly wide range of polyester articles. In the absence of a Community solution to the problem there would therefore be reason to fear diversion of trade. Finally the ever increasing share of the market of the Community which is taken up by Hong Kong cannot fail to be prejudicial to certain who may be less competitive and therefore run the danger that their sales may

other less developed countries diminish or be eliminated.

4 The Commision therefore considers that negotiations should be requested with Hong Kong as the working group on commercial questions has requested. negotiations ought to begin very shortly without waiting for the results of the

These multilateral discussions in the GATT or the proposals announced by the Commission in its communication to the Council concerning the harmonisation of import arrange- ments for various non-cotton textile products. Moreover these negotiations would

in fact constitute the first application of the content of this communication. The guidelines for these negotiations could be as follows:

certain sensitive products of which a list would be finalised on the lines of proposals by the Commission to the special Committee of article 113 would be subject to ceilings in the form of voluntary restraints on the part of Hong Kong, the quotas at present existing in France needing to be suspended during the life of this agreement; other products regarded as non-sensitive would be liberalised subject to a safeguard clause of the type specified in regulation 1025 of the Council; annual growth in the ceilings would be included but it would be borne in mind that a more balanced accent to the market must be assured; the ceilings would be managed as in the agreement made between the Community and Hong Kong on cotton textiles according to a system of dual control; arrangements for flexibility will also be identical/in the cotton agreement; the agreement should contain a revision clause which would permit it at the end of 1973 to be adapted to the situation which would be created by the expiry on 30 September 1973 of the Long Term Arrangement on cotton textiles and by the expiry of the bilateral agreement on the same subject concluded between the Community and Hong Kong and at present valid until 31 December 1973.

5 Should Hong Kong not agree. within sufficient time to a negotiation of this character, or in case the negotiations should be excessively long drawn out, the Commission reserves the right to submit to the Council proposatsens with a view to the imposition of appropriate measures on a unilateral basis.

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The Commission therefore recommends to the Council by virtue of article 113 of the Treaty to take the following decision.

RECOMMENDATION FOR A DECISION BY THE COUNCIL CONCERNING THE OPENING OF NEGOTIATIONS WITH HONG KONG FOR THE CONCLUSION OF AN AGREEMENT ON THE SUBJECT OF SYNTHETIC ARTIFICIAL AND WOOLLEN TEXTILES

THE COUNCIL OF THE EUROPEAN COMMUNITIES

Considering the Treaty instituting the European Economic Community and particularly its article 113, considering the recommendation by the Commission, considering that imports originating in Hong Kong of synthetic, artificial and woollen textiles have

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