TNAG-0628-FCO40-776-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 127

C.S. 166

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XCCI(77)3

5

- 2 -

The next Committee meeting is now scheduled to start on

5th July and it is hoped that by then the EEC will have agreed on a negotiating position.

Hong Kong's Position

6

Before the November/December 1976 meeting of the Textiles Committee, the Textiles Advisory Board had endorsed the following broad policy guidelines proposed by the Director of Commerce and Industry:

(a)

(b)

Hong Kong accepts the idea of the continuation of the MFA after its expiry on 31st December 1977; and

Hong Kong's broad objective is to secure improve- ments where possible whilst ensuring that the MFA does not become more restrictive than it is at present.

7

During that meeting the Hong Kong representatives found it necessary to modify Hong Kong's position without departing from the broad policy guidelines above. It became clear that given the EEC's attitude and the weak bargaining power of the developing exporting countries, any proposals to negotiate changes to the MFA would open the way for the EEC and certain other developed countries to introduce changes which would make it more restrictive than at present. In view of the USA's position and the support given to it by most developing countries, Hong Kong also stated its support for an early decision to extend the MFA without change.

8

The Textiles Advisory Board has endorsed this position, which is taken not because Hong Kong is satisfied with the present MFA, or believes that it cannot be improved upon, but because the alternatives either a more restrictive MFA or, in the absence of an MFA, the probability of import restrictions more inhibiting than the export restraint provisions of the MFA are even less acceptable. An early decision on extension is also desirable in order to remove the un- certainties, which will inevitably become more of a problem for the trade as time goes by, about the framework for international trade in textiles in 1978 and beyond.

The US Position

9

In spite of demonstrations by textiles workers in the US in

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