TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 131

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Fresent:

THE FUTURE OF THE MFA

Note of a Meeting in Government House

on 25 March 1977

CL

20 AWR 177

H.E. The Governor

Mr. D.H. Jordan

Director of Commerce & Industry

Mr. W. Dorward

Deputy Director of C & I

Yr. P.K.I. Trao

Deputy Director of C & I

Mr. T.H. Chau

Assistent Director of C & I

Mrs. Shelley Lau Private Secretary Government House

Mr. D.F. Murray

Assistant Under-Secretary ECO

Mr. J.A.B. Stewart

Head, Hong Kong Department FCO

4. 15 4000 12:20 MSI 979

2.

H.E. asked Mr. Jordan to take the chair.

Mr. Jordan said that he would not go into the general economic, psychological or political aspects of the matter but would concentrate on Mr. Meacher's speech in the House of Commons debate on textiles in February 1977. He handed over to Messrs. Murray and Stewart copies of a paper (attached) he had prepared which examined the arguments in Mr. Meacher's statement and explained why Hong Kong felt that there was no need to change the MFA. He then referred to the four areas of deficiency in the MFA mentioned by Hr. Meacher :

(a)

(b)

(c)

(a)

the MFA does not provide adequate protection, and, because of the 6% annual growth rate, the brunt of a recession is borne by the domestic producer;

present levels of import penetration in particular sectors are unacceptable because the 6% growth rate in the MFA is too high in relation to the prospective growth of the domestic market which is now considerably less "roey" than when the MFA was negotiated;

as a result of the protracted bilateral negotiations between the EEC and its supplying countries, trade during the negotiations period built up so that the bace levels at which quotas were fixed reached artificially high levels;

the MFA lacks an adequate safeguard in that new suppliers of sensitive products have to be picked off one by one.

HIC

Employed delaying tactic

G.F

322

CON

13.