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at rates below the minimum 6 percent prescribed for Article 3 restraints; but "in overall terms" these agreements were still more liberal than
'measures provided for in Article 3".
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In a series of private consultations between the key developed countries on the one hand and the key developing countries on the other, the USA, EEC, Japan, the Nordic countries, Hong Kong, Korea and Mexico were able to agree on the text of a paper (COM. TEX/W/44) which was then circulated to the Committee at the request of the USA and which called for the extension of the MFA without change for four years
subject to confirmation by signature as from 15th December of a protocol for this purpose". This paper noted the EEC's statement on its import problems and the basis on which it intended to achieve its stated objectives by bilateral consultations and negotiations; and although it referred to "the possibility of jointly agreed reasonable departures from particular elements of the MFA in particular cases" there was also a specific reference to "a mutually acceptable solution" under Article 3 or Article 4 of the MFA. This draft was, of course, an attempt to paper over the cracks and keep alive the possibility of an extended MFA. The EEC could carry the more protectionist Member States by claiming that its wording provided a means of achieving its stated objectives in bilateral negotiations; while Hong Kong and others could argue later that this paper did no more than affirm past and present practice and would not involve an obligation to concede anything in a bilateral agreement unless it was mutually acceptable.
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However, some of the other developing countries, led by Brazil and India, could not accept paper COM. TEX/W/44 and, instead, circulated their own paper (COM. TEX/W/43). Hong Kong did not accept this paper basically for two reasons. The first was that since the EEC did not accept it, it clearly did not provide a basis for reaching an early agreement on the extension of the MFA without change and would, there- fore, have defeated the main objective. Secondly, the apparent let-out for the EEC from its obligations under the MFA was worded in such a way in this paper that it clearly implied that Hong Kong and South Korea should be the only suppliers which would be obliged to solve the EEC's problems.
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At the final session of the Textiles Committee meeting on 24th July, paper COM. TEX/W/44 was supported by 16 participants (including the USA, EEC, Japan, Hong Kong, South Korea, Mexico, the Nordics and the ASEAN countries) which between them account for about 85% of world trade in textiles; while paper COM. TEX/W/43 had the support of 11 participants (including Brazil, India, Egypt and some of the socialist countries of Eastern Europe). Pakestan, Canada and Australia reserved
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