TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 50

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FM FCO 20182@Z

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24 JUN 1977

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HKK 121 1616]

UKREP BRUSSELS DESKBY 201930 Z

LUXEMBOURG DESKRY 201933Z

PARIS AND BONN DESKEY 2107 ØZ

TO IMMEDIATE UKREP BRUSSELS TELNO 1388 OF 20 JUNE

AND TO MEDIATE LUXEMBOURG

INFO IMMEDIATE PARIS BONN, ROUTINE ALL OTHER EEC POSTS, UKMIS GENEVA

TEXTILES: FRENCH GATT ARTICLE XIX PROPOSALS

LINE TO TAKE

1. THE UK FIRST HEARD OF THE PROPOSALS THROUGH THE FRENCH PRESS ON 27 JUNE. WE HAVE NOT HAD TIME TO CONSULT UK MINISTERS ON WHAT IS CLEARLY A PROBLEM WHICH COULD HAVE WIDE IPLICATIONS. WE ARE THEREFORE WITHOUT FORMAL

INSTRUCTIONS, IT IS NEVERTHELESS CLEAR THAT ACTION OF THIS NATURE, BY OR ON BEHALF OF AN INDIVIDUAL HENDER STATE OF THE COMMUNITY, MUST CREATE A SITUATION WHICH IS IN EFFECT A COMMUNITY-VIDE PROSLEM, EC THE UK MARKET COULD EASILY BE AFFECTED BY DEFLECTION OF TRADE. MOREOVER, THE UK HAS HIGHER IMPORT PENETRATION THAN FRANCE ON ALL THE 4 ITEMS ON WHICH WE UNDERSTAND THE FRENCH WISH TO TAKE ACTION. WE CLEARLY NEED TINE TO CONSIDER THE FAR- REACHING IMPLICATIONS OF THIS HATTER. WE ALSO NEED FURTHER INFORMATION PARTICULARLY ON THE LEGAL

ASPECTS OF SUCH ACTION. HOW DO THE COMISSION PROPOSE TO HANDLE THE MATTER, HAVING REGARD TO THE COMMUNITY'S C2LIGATIONS TO THIRD COUNTRIES, NOT

LEAST UNDER THE COMMUNITY'S BILATERAL TEXTILE AGREEMENTS?

&

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12 THE FRENCH