TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 136

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'themes' which should be discussed

Som

cumulative disruption, high import penetration, disruptively low prices, forestalling during negotiations and the base levels for establishing quotas.

5.

Following this meeting, we heard rumours that the Community

would seek to modify the MFA in such a way as to permit it subsequently in bilateral negotiations with Hong Kong to deprive us of all growth.

It was even suggested that it might seek to reduce our existing

quotas. In addition, when Sir Peter Carey visited Hong Kong at the

end of January, he said, at a meeting with the Trade and Industry. and Textiles Advisory Boards, that the UK would be seeking "more

adequate protection against cumulative market disruption, particularly

ir periods of recession".

6.

Since the growth rate for most of the sensitive categories

in the UK market is only 0.5% under the HK/DC Textiles Agreement,

we were concerned that "more adequate protection" might involve

actual reductions. We therefore sent telegram lio. 131, of 4 February

to the FCO expressing our concern and requesting a general assurance

that HG would protect Hong Kong's interests and, where they conflicted

with the UK's interests, seek to compromise, and specifically that

there would be no further reduction on growth potential.

7.

When Jordan was in London in February for talks with UK

officials, they said they could give no such assurances.

8.

Statement of UK Policy on the MFA

On 21 February there was a debate in the House of Commons

on textiles, during which the Parliamentary Under Secretary of State

for Trade, Mr. Michael Meacher, made a statement on UK policy on the

future of the IFA. He listed the IFA's deficiencies as the UK saw

them and the improvements which it would seek in the NFA to correct these deficiencies. He recalled the five main problem areas (set out

in paragraph 4 above) in the present A to which the Community had drawn attention in last December's Textiles Committee Meeting;

and stated that the Community was working on a detailed negotiating

mandate to convert these points into practical proposals and that

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