TNAG-0628-FCO40-776-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 176

CODE 12-77

Reference.......

FUSS(T) OM NO 40%

Contd

appeared similar in some respects to the acute problems of the UK industry. Employment in the UK industry had declined steadily over twenty years and the TA had placed the whole burden of the recent recession on the dunestic industry. Since 1973 100,000 jobs had been lost in the UK and a similar number could disappear in the next five years unless there were major changes in the way the MFA operated.

The world economy was moving out of the recession only slowly. Although there had been signs of improvement in the UK textiles and clothing industry the latest indications were that the recovery was already fading. Production in many cases remained lower than in 1973. In these circumstances we could no longer guarantee exporting countries a minimum annual quota growth rate of 6%. In sore sectors, import nenetration was over 60% and any further increase would threaten nirimun viable levels of production. If unchecked, this could lead to the progressive collapse of the whole industry. In these cases, the EEC proposed to set overall limits for low-cost-imports within which limits for individual suppliers would be renegotiated bilaterally.

In conclusion Mr Neacher said that the UK's experience was shared by the rest of the DEC. The EBC was determined to secure

The UK,

substantial changes in the operation of the MTA and would shortly be presenting its detailed proposals in Geneva. however, fully recognised the importance of the textiles and clothing industry for the prosperity of the Hong Kong economy and in Community discussions had resisted efforts to discriminate against Hong Kong.

Billion

B Williams APS/PUSS(T)

V/S 820A Extn 3663

| July 1977

cc PS/Secretary of State

FS/Secretary of State (1) PS/Secretary

i'r Ridley

15: Gray Ir Steele

Ir Lightran 1r Abrenson Mr Roberts

he Wright Kr Loughend I Comfort