TNAG-0521-FCO40-616-Visit-of-Lord-Goronwy-Roberts--Parliamentary-Under-Secretary-1975 — Page 105

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4. THE APPLICATION OF THE BURDEN SHARING FORMULA ARISES FROM THE DECISIONS MADE ON COVERAGE. WE THINK WE NOW UNDERSTAND HOW

THE FORMULA WORKS BUT WE WOULD WELCOME SOME FURTHER EXPLANATION

WHETHER IT IS INTENDED TO APPLY ONLY IN THE CASE OF

COMMUNITY-WIDE RESTRAINTS OR WHETHER IT WOULD BE APPLIED ALSO

TO 'REGIONAL SOLUTIONS''. WE UNDERSTAND WHY YOU SOUGHT THE

ADOPTION OF THE FORMULA AND WE CAN UNDERSTAND THE ARGUMENT THAT THE MORE SUBSTANTIAL IMPORTERS SHOULD SLOW DOWN WHILST THE SMALL ONES CATCH UP. WHAT BOTHERS US IS THAT THE APPLICATION OF THE FORMULA, AS WE UNDERSTAND IT, WOULD APPARENTLY MEAN THAT HONG KONG WILL BE RECEIVING VIRTUALLY NO GROWTH IN OUR ESTABLISHED AND PRINCIPAL MARKETS (1.E. THE U.K. AND THE F.R.G.) FOR THE FORESEE- ABLE FUTURE. THIS COULD WELL LEAD TO US COMING UNDER PRESSURE HERE

TO BREAK OFF THE NEGOTIATIONS ON THE GROUNDS THAT A MUTUALLY

ACCEPTABLE AGREEMENT' CANNOT BE REACHED. WE ARE ALSO CONCERNED ABOUT THE PACE AT WHICH THE CATCHING UP PROCESS PROCEEDS (WE

ESTIMATE THAT FOR SOME PRODUCTS IT WILL TAKE UP TO 25 YEARS BEFORE FRANCE EVEN GETS CLOSE TO. ITS ECONOMIC SHARE) AND ALSO ABOUT THE CALCULATION OF THE RESTRAINT LEVELS FOR SOME MEMBER STATES.

5. WE UNDERSTAND THAT THE CALCULATION OF ''ECONOMIC SHARE','

WAS BASED ON 1973 IMPORTS OR AN AVERAGE OF IMPORTS OVER 1971 TO 1973. BUT THIS LEVEL OF IMPORTS CLEARLY CANNOT BE THE BASIS

OF RESTRAINT LIMITS IN AN AGREEMENT REACHED UNDER THE M F A.

IN MANY CASES THERE ALREADY EXIST HIGHER QUOTA LIMITS WHICH, BY DEFINITION, ARE A LEVEL OF IMPORTS ALREADY ACCEPTED AS SUFFICIENTLY LOW TO CONTAIN ANY RISK OF MARKET DISRUPTION. IN PARTICULAR, IT WOULD BE IMPOSSIBLE TO JUSTIFY THE CONVERSION OF THE PRESENT

FRENCH IMPORT LIMITS INTO EXPORT RESTRAINTS UNDER THE M F A. IN THE CASE OF FRANCE SOME ATTEMPT AT MAKING A CASE FOR RESTRAINT MUST FIRST BE MADE, BUT WE FIND IT DIFFICULT TO SEE HOW IT CAN BE, WHEN OUR TEXTILE TRADE WITH FRANCE HAS NEVER BEEN ALLOWED TO FIND ITS NATURAL LEVEL.

6. WE OF COURSE WISH TO BE REASONABLE IN THESE NEGOTIATIONS, BUT WE CANNOT AFFORD TO ESTABLISH PRECEDENTS WITH FRANCE WHICH MORE IMPORTANT MARKETS COULD THEN USE TO OUR DISADVANTAGE. AUSTRIA, AUSTRALIA, CANADA, NORWAY AND SWEDEN (WHOSE TOTAL POPULATIONS DO NOT EQUAL THAT OF FRANCE), FOR EXAMPLE, ARE FAR MORE IMPORTANT TO US IN TEXTILE TERMS. THE STARTING LEVELS OF ANY RESTRAINTS TO FRANCE COULD THEREFORE BE A REAL STUMBLING BLOCK TO A SUCCESSFUL NEGOTIATION.

/7. REVERTING

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