TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 52

Mr Fretwell

Mr Cortazzi

PS/PUS

CONFIDENTIAL

HKK 121 616/1

RECENZO I KROM AFCPS/Mr Judd or

136K

INDEX

2 1 SEC MOS

J

Mr Butler

Mr Murray or

Mr Milton HK&GD Mr O'Neill SAD

11606

Flag A

Flag B

PS/Lord Goronwy-Roberts

Private Secretary

HONG KONG AND THE MULTI FIBRE ARRANGEMENT

PROBLEM

1.

On 7 September, the Commission approved a paper, which

will be put to the Council on 20 September, outlining its approach

to the negotiation of new bilateral textile agreements under the

GATT Multi Fibre Arrangement.

2.

The Governor of Hong Kong has been unofficially informed

by the Commission negotiator (Mr Tran) of the figures for their

textile quotas for sensitive products which are likely to result

for Hong Kong. He has written to the Department to express his

concern at the effect on Hong Kong's economy; and he has further

implied that it could damage the climate in which the China Light

and Power Stration contract could be awarded. The basic question

is how far HMG should indulge in special pleading for Hong Kong

in view of its status as a dependent territory.

BACKGROUND AND ARGUMENT

The Community

3.

The effect of the proposals in the paper will be to set

up Community internal global import ceilings for all its major

textile importants and divide those ceilings between the various

supplying countries in such a way as to ensure that:

(a)

(b)

there is no risk of the ceilings being exceeded;

room is left on the Community market for newcomers and

small suppliers;

CONFIDENTIAL