TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 145

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28.

We have already explained why this proposal is unlikely to be accepted by exporting developing countries. But in any case, as far as we are aware, even within the Community it has met with

opposition from Germany and Denmark and unless this opposition is renoved it will not become part of the Community's negotiating Mar date.

"We want to change the MFA rules so that growth rates can be

adjusted downwards. The Community has now accepted the principle

that growth rates should vary in inverse proportion to the rate of

import penetration.'

29.

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As we have already explained, the only valid yardstick

with which to measure the state of an industry is not the rate of

import penetration but the level of production including production

for export. Import penetration looked at in isolation is meaningless,

particularly where the importing country also happens to be a

substantial exporter. And this is the case with the UK as well as

the Community as a whole. The principle that growth rates should

vary in inverse proportion to the rate of import penetration is a "principle" with no sound basis.

30.

In any case, we have already shown that even under the present IFA rules growth rates can be reduced below 6%.

31.

A point worth noting in the Commons debate is that Mr.

Meacher, when asked a direct question as to whether he envisaged a situation where there was a negative growth rate on imports, did

not give a direct answer. We are therefore still unsure whether the UK is seeking merely "zero growth" or actual cut-backs in existing quotas.

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