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C.S. 166
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XCCI(77)3
April 1977 and pressures from the US industry and labour unions, the US Administration is still apparently in favour of an extension without change. For administrative and constitutional reasons it is very difficult for them to take any other stance.
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Internal pressures and the difficulties being created by the EEC (see below) may, however, have resulted in a stiffening of US policy on the future of bilateral agreements. At their request, Hong Kong held a first round of negotiations in Washington in early May to consider a new bilateral agreement to follow the present one which expires on 30th September 1977. Some of the very tentative proposals made by the US side were so unreasonable and so contrary to the provisions of the present MFA that the negotiations were adjourned without any progress being made. A second round of negotiations started on 1st June in Europe and is still continuing.
The EEC Position
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EEC dissatisfaction with the MFA, as expressed at the November/December 1976 Textiles Committee meeting, reflected the UK Government's position on the future of the MFA as stated by Mr Michael Meacher, Parliamentary Under-Secretary of State for Trade, in a speech in the House of Commons in February 1977. These views are apparently shared by France; and, to a greater or lesser extent, by other Member States.
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The UK and France have two main complaints about the MFA. The first is that it lacks an adequate safeguard against new suppliers of sensitive products. Their view is that the MFA should contain a provision to allow the introduction of a single quota to deal with all disruptive or potentially disruptive imports of a sensitive product where import penetration is high; a concept given the misnomer
globalisation" or "global" quotas. The second is that the present minimum growth rate of 6% is too high. The remedy which has been proposed is that growth rates should vary in inverse proportion to the rate of import penetration.
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These arguments are based on false premises. The "global" quotas being proposed would not be truly global, since imports from other EEC Member States and associated overseas territories, from EFTA countries and from North America either could not or would not be restrained; in the UK's case, almost half of its textiles and clothing imports are from these countries. And the import penetration argument cannot be sustained in the case of
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