RESTRICTED
OF DISMAY AT THE COMMISSION PROPOSAL TO REDUCE THE SENSITIVE LIST BY AS MANY AS 44 ITEMS. THE IMPRESSION IS GROWING THAT THIS FACET OF OUR WORRIES COULD HAVE A SOMEWHAT DIFFERENT ASPECT IN SEPTEMBER BY THE TIME THE WORKING GROUP DOES RECON VENE, SAY, ABOUT 20 SEPTEMBER IN FABIANI'S VIEW.
HE ASKED IF WE HAD ANY HONG KONG COUNTER-SUGGESTIONS ON THE COMMISSION'S PROPOSALS. 1 REFUSED TO BE DRAWN AS I AM NOT. ENTIRELY SURE OF HMG'S CURRENT POSITION BEYONG THEIR RESERVATION ON HONG KONG, BUT TSAO AND I HAVE BEEN WORKING ON SOME IDEAS. THE ITALIANS HAD CERTAINLY TAKEN ON BOARD WITH SOME SURPRISE THE STARK REALITIES OF THE DIVERSION OF TRADE SPRINGING FROM DISCRIMINATION. THIS WAS POINTED UP BY THE STATISTICS WE PROVIDED FROM YOUR BRIEF. THE ITALIANS WERE PARTICULARLY IMPRESSED BY OUR ARGUMENTS ON THE DANGERS OF SUCH DIVERSIONS LEADING TO PERMANENT NEW CHANNELS OF TRADE BETWEEN ITALY AND OTHER SUPPLIERS RATHER THAN HONG KONG, WE CONTINUED TO STRESS THE HK/ITALY BALANCE OF TRADE FIGURES IN THEIR
FAVOUR.
TEXTILES (UNDERLINED)
5. PRIOR TO CUR VISIT FABIANI AND GALDI HAD NEVER THOUGHT
THAT IT MATTERED MUCH TO US THAT THE CONTINUATION OF THE
STATUS QUO ON TEXTILES (PLUS A SMALL GROWTH ELEMENT OF, SAY, 5%) WAS PROBABLY INEVITABLE FOR 1975, IN TERMS OF THE GSP. WE EXPLAINED HOW EVERY SINGLE MONTH OF DELAY WAS NOW
PROGRESSIVELY WORKING AGAINST OUR INTERESTS. NEVERTHELESS NEITHER OF THEM HELD OUT HOPE OF MOVEMENT ON THIS ASPECT
DURING 1974.
6. GALSI'S EARLIEST FORECAST FOR THE BILATERALS WITH ASIAN SUPPLIERS WAS END-NOVEMBER. HE SEEMED A BIT UNSURE WHETHER EVEN THE MTA 1 APRIL 1975 DEADLINE COULD IN FACT BE MET BY THE EEC, ALTHOUGH HE DID EXPECT SPECIAL EFFORTS TO KEEP IN STEP. THIS IS NOT OUT OF LINE WITH RIDLEY'S COMMENTS IN GENEVA ON JULY 9 TO DORWARD REPORTED TO ME
BY TSAO.
7, THERE ARE, IT SEEMS, HAPPILY NO SERIOUS CURRENT ITALIAN TEXTILE WORRIES CONCERNING THIS SECTOR OF OUR MUTUAL TRADE. GALDI ACKNOWLEDGED THE REAL PROBLEMS FOR US IN FURTHER DELAYS ON THE POLICY AND I DOUBT IF THE ITALIANS WOULD BE OPPOSED TO GENERAL SUPPORT OF HMG'S PROPOSAL FOR THE REMOVAL OF DISCRIMINATION. WE DID NOT DISCUSS ANY HALF MEASURES.
2
RESTRICTED
/8. ON THE
No comments yet.
Private notes are available after approval.