i
CONFIDENTAL
(c)
The Hong Kong interpretation of the agreement, and the consequent issue by Hong Kong of 15.8% of the annual quota to cover the period between the entry into force of the agreement and the end of this year,
was bound to lead to difficulties for Member States.
The Dutch have already taken a strong line. We believe that if the Hong Kong negotiators do not come to Brussels in December prepared to make a realistic
offer to settle the serious difficulties in which
Member States find themselves, the Community wil be under severe pressure to take action itself.
That
action could only redound to the disadvantage of Hong Kong.
(a) The same is true of public opinion in this country.
II M Government is under, severe pressure from the British textile industry to control disruptive imports Hong Kong's actions can only increase that pressure and may in the end hurt Hong Kong in the bilateral as well as in the Community context.
Background
2.
Textile and clothing industry accounts for nearly 50% of Hong Kong's exports. Hong Kong acceded to the GATT Multi-Fibre Arrangement (IFA) regulating international trade in textiles and is now concluding bilateral agreements under the MFA with her principal trading partners. The EC is second in size and importance only to the United States market. Among EDC Member States, Britain and Germany are the largest markets, taking approximately equal shares.
3.
On 18 July 1975 the Hong Kong Government and the Community initialled a textiles agreement which provides for restrai.: on Community imports of an increased range of products until the end of 1977. The agreement gives Hong Kong an assured share of the Community market and guarantees annual growth rates for the next three years upon which her lower cost rivals, Taiwan and South Kores. cannot encroach. An important feature for the UK is the parallel agreement with our Community partners for "burden sharing" unter which the historically sneller importers, e.g. Prince, will tele a much larger share of the growth in Community quotas which is built
/into the
CONFIDENTIAL
No comments yet.
Private notes are available after approval.