TNAG-0630-FCO40-778-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 121

CONGIDENTIAL

HONG KONG AND THE MULTI-FIBRE ARRANGEMENT

LINE TO TAKE

The Commission's Proposals

1.

The Council of Ministers at their meeting on 20 September

gave general agreement to the Commission's approach for the forthcoming

bilateral negotiations, subject to detailed examination by COREPER

of the Commission's figures for global ceilings and imports from

individual suppliers. We have just received the Commission's

proposals for the figures and are now studying them. At first sight

they look broadly similar to those put forward by Mr Tran, the

Commission's chief textile negotiator, when he visited Hong Kong in

August. Mr Dorward may care to talk further to officials about the

details.

2.

The Commission's approach is based on the concept of

concluding comprehensive agreements covering all textile products.

and keeping the totality of the Community's low cost imports of all

products within internally agreed Community limits.

These, for the

most sensitive products at least, will stabilize import

penetration at 1976 levels. The severity of controls will

depend upon the degree of sensitivity of the products, which are

divided into four categories for this purpose. In this way the

Community will hope to guarantee both security of supply to the

exporting countries and security against significant increases

in import penetration to the Community's textile industries. The

Commission's plan is to conclude the bilateral negotiations by the

end of November. The Community have agreed that if the bilateral

negotiations are unsuccessful, unilateral action will be taken to

impose the necessary quotas as from 1 January 1978. Ministers

CONFIDENTIAL