TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 133

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bilateral negotiations which the EEC proposes to conduct with its main textile suppliers later this year; and in this connection the EEC obviously regards Hong Kong as the key to the situation because of its predomi- nant position in the EEC market, particularly in most of the items which the EEC regards as highly sensitive.

Informal Bilateral Talks with the EEC Commission

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Informal talks were held in Hong Kong on 8 and 9 August between a team of EEC Commission Officials led by Mr Tran Van Thinh, Special Representative for Textiles Negotiations, and Hong Kong Trade Industry and Customs Department Officials. These were held at the request of Mr Tran, who had already held similar talks in Pakistan, India and with the representatives of the ASEAN countries in Bangkok before he visited Hong Kong and was scheduled to visit South Korea and Brazil after Hong Kong. The purpose of this series of visits was to enable him to draft a negotiating mandate for bilateral agreements to be put to Member States for approval in September.

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(a)

(b)

(c)

(d)

During the course of the talks, Mr Tran said:

the EEC intended to hold negotiations with about 22 exporting countries starting from October;

if these bilateral negotiations failed, then the EEC would be forced to take unilateral import action from 1 January 1978 and one of the possibilities was GATT Article XIX action (which provides for emergency action on imports of particular products applied in a non-discriminatory manner to all non- EEC or associate suppliers);

the EEC Commission fully realised the undesirable consequences of Article XIX action both for the EEC and for world trade as a whole and wished to avoid using it if necessary; but if it had to be used then the EEC could allocate quotas to developed countries such as the USA and Japan which would be beyond their capacity to utilise fully, thus ensuring that they would not take retaliatory action against the EEC;

but if Hong Kong could conclude a bilateral agreement with the EEC, then regardless of any problems the EEC encountered with other suppliers and any subse- quent changes in attitude within the EEC, this agree- ment would be allowed to run its full term;

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