TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 127

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the first half of 1974 import penetration was around. the 25% level. Since April of this year it has averaged over 34%; in one month nearly reaching 40;%. It is just this sort of situation for which Article 135 is tailored, as, on the aid side, the Chrysler situation fits well into the "exceptional circumstances" provisions of the third sub-paragraph of Article 93,2

of the Treaty of Rome.

As regards the rest of the package:

i we are I think agreed on cotton yarn from Spain

(where I have agreed with the Secretary of State for Industry on the level of the quota) men's woollen suits and men's and worten's leather shoes from Eastem Kurone (where we would if possible secure the agreement of the countries concerned to "voluntery" restrictions at hair end, falling bank on import quotas if this agreement is not forthcoming); we must also ensure that there is no compensatory increase in imports of children's leathe

footwear.

ii as regards Portugal the Secretary of State for Industry

and I are agreed that, while on other textile and clothing items we should await the results of the "auto-limitation" undertakings which the Community will be trying to secure from Portugal, we must ourselves impose restrictions forthwith on cotton am and woven man made fibre fabrics. We could justify this action against accusations that we were sabotaging the coming negotiations with Portugal by pointing out that there has been a sharp rise in imports of these products from Portugal this year and that, once the negotiations become public knowledge,

The size of the there could be massive forestalling.

quotas would be those which have been discussed in Brussels in relation to the negotiating mandate and should, therefore, raise no problems with the Commission or other Member States; they would involve a considerenì

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