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imports increased (by value) in 1976'by about the same percentage as to:al imports. Further quantities came from the FTA countries (18% of textile imports, 11% of clothing).
The
"Another scrious weakness... is the beise level at which the quotas are fixed.
The FA principle of no cut-back on previous trade levels is an understandable one but in practice it has worked to the serious disadvantage of the importing countries. protracted bilateral negotiations between the DLC and its supplying countries 7 were difficult negotiations which inevitably took time to complete, and trade during the nerotiations period built up so that the bare levels, when the agreements were eventually signed, were fixed at artificially high levels."
18.
Neacher is referring here to negotiations under Article 4
of the MFA and not Article 3.
19.
Article 3 of the IFA does provide for a base level which is tied to a reference period which is in turn tied to the date of the importing country's request for consultations, so that regardless of the date of conclusion of consultations, there is no possibility of an exporting country taking advantage of "protracted negotiations" to build up "artificially high levels". The trouble with Article 3, from the point of view of importing countries, is that it can be applied only in situations of market disruption, for which the MFA lays down certain specified criteria, which the EC never attempted to meet in its negotiations with Hong Kong.
20.
Article 4 on the other hand is designed to deal with "real risks" of market disruption. There is no definition of "real risks" and importing and exporting countries may conclude bilateral agreements · under Article 4 on "mutually acceptable terms", the only constraint being that such bilateral agreements "shall on overall terms,
4
including base levels and growth rates, be more liberal than measures provided for in Article 3". But in spite of this, as we have already pointed out, our present MFA Article 4 agreements with the USA and the 10 both provide for growth rates lower than the 6 in Article 3. In the case of the latter agreement, in spite of the fact that the negotiations were concluded in July 1975, the quotas for the first agreement year were set on the basis of either 1974 trade levels or
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