TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 148

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put forward), was almost unanimously regarded as distinctly harmful to the interest of developing countries on the whole.

20. The term 'mimumum viable production', although appearing in Articles 1(2) of the Arrangement had been interpreted in a manner adverse to the interests of the exporting developing countries in as much as even moderate increases had been regarded as affecting the viability of production units, especially in the Nordic countries. It was noted in this context that restrictive measures under the Arrangement did not seem to operate as between developed countries them-

selves.

21. In regard to growth rates, developed countries had succeeded in confining growth rates to the minimum of 6 per cent allowed in Annex B, and there was hardly any evidence of higher percentage growths allowed - although explicitly permitted under the Arrangement. On the contrary, on the ground of continuing recession in the Textiles industry, pressures were exercised by developed countries to get developing countries to accept lower growth rates by putting forward two kinds of proposals:-

(i)

to restrict growth rates to actual growth and consumption; and

(ii) to have differential growth rates with reference to

different exporters.

The latter proposal was characterised by a number of parti- cipants in the course of discussion as another device for dividing developing exporting countries. Several partici- pants warned against the danger of accepting proposals for guaranteed growth rates tied to import penetration concepts which were themselves untenable.

22.

On the question of base/reference periods referred to in Annex B of the Arrangement, it was pointed out during the discussions that developed countries almost consistently had sought to change the base period of twelve months provided for therein on the ground especially that consultations which were initiated took a long time and by the time they were concluded, imports had a tendency to increase sharply. It was further contended by developed countries that the duration should operate from the date the importing developed country made a request for consultation and not from the date the consultation had been mutually agreed or accepted. This was one of negotiating aspects that had been highlighted in one of the papers submitted to the Seminar by Mr. Mills of the Hong Kong Delagation, emphasising the need for developing countries to insist on their rights about determining the exact date from which the consultation under Article 3 is supposed to have been initiated.

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