TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 90

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FROM UKMIS GENEVA

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TO FCO Telno 27 of 26 May 1977. Rept for info to UKREP Brussels, UKDEL OECD, Washington, Paris, Brussels, The Hague, Tokyo.

Viki 1777

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GATT COUNCIL, 23 MAY 1977

Summary

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HKK 121/616/1

The agenda included a number of difficult and potentially acrimonious questions including notably textiles, Zenith, DISC (and allied matters) and GATT staff salaries, In the event with the contribution of some trisk and quick-thinking chairmanship from De Geer (Sweden), the discussion was mostly unheated and to the point.

Community Co-ordination

2.

In co-ordination the Commission (Luyten) circulated drafts

The Presidency of interventions on the first three of these items. circulated the text of a statement on staff salaries to be made on behalf of the Nine, which had been agreed in earlier consultations, in which the US, Canada, Australia, Nordics and Japan had also participated.

3.

The Commission texts were approved with only minor changes. On DISC the Netherlands (Feij) recalled that they had opposed the

Now that the item had been inscription of this item on the agenda.

They inscribed, they had no difficulty with the Commission draft. thought in addition that it might be helpful if they themselves were to make a further intervention on Netherlands tax practices. This would have two objectives. First they would seek to dispel any impression that they were blankly rejecting the report of their Panel. Second, they would seek to "nourish" the discussion, on the assumption that the US would have nothing of substance to say, by throwing in some reflections on the traditional GATT interpretation of exports. They would support this by reference to Article III of the GATT, relating to the taxation of imports by the importing country, and by pointing to the anomalies which the US taxation policy and practices caused, where what the Netherlands would see as import activities were concerned,

Discussion

Item 1: Textiles MFA (COM.TEX/8)

4. The Director-General briefly introduced the Textiles Committee's major review of the MFA (which was before the Council in accordance with Article 10.4 of the MFA). After a brief discussion on the need to settle the MPA's future soon (my telno 276) the report was adopted.

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