TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 22

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any such proposals with great care and cannot accept any commitment now. The Commission also hope to redefine rules

of origin in a more restrictive fashion and to obtain Council approval for an industrial policy for textiles, involving greater use of the Social Fund and RDF money to aid the

Community's textile industry.

11. The bilateral negotiations are to be conducted under the proviso, firmly stated in the Commission's recommendations, that the Community will take unilateral action to impose the necessary quotas against any supplying country or countries which have not signed up a satisfactory bilateral agreement by 30 November. This will be made extremely clear to all the Community's negotiating partners.

12. The Commission are working to an extremely tight timetable. The detailed figures in the breakdown of quotas between supplying countries have not been supplied in time for consideration and

for recommendations on them to be made to the Council. They will probably be approved subsequently at Working Group and COREPER level. But the Commission may hope that a special Council may be convened, perhaps composed of trade Ministers, to take the final decision. In any case, they are insisting that it be taken in time for them to start negotiations in the second

week of October. They can therefore be expected to press Member

States hard for rapid agreement to as much of their scheme as possible. They plan to negotiate simultaneously, in batches of 7 or 8, with all the countries concerned. They are committed

to reporting back on progress made to every Foreign Affairs

Council until the matter is resolved.

UK Problems

13. There are naturally a number of points in the Commission's approach about which we are still unhappy. The main ones are:

(a)

we need to ensure that the already agreed policy of minimal growth on global cotton fabric ceilings and zero growth on cotton yarn for the next two years

will be put into force. The crisis situation in the

/Lancashire

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