?
(a) If we are to secure our objectives in the bilaterals the terms for
Hong Kong and other dominant suppliers will have to be severe.
Until now we have considered that it would be enough to
set quotas at 1976 trade levels, with reductions in present quota
access for large suppliers where their quotas were under used to make
way for newcomers. But it is now becoming clear that for a
number of the most sensitive produtcs 1977 imports will be lower
than 1976 levels. And Department of Industry officials are
therefore coming round to the view that trade cut-backs may be
necessary to make the global ceilings secur and low access for
newcomers.
(b) We would not wish to hold up progress in the bilaterals
if other ember States are agreed on cut-backs. And it would
also be embarrassing to seek lenient treatment for Hong Kong
(far and away the SEC's largest supplier) when we have consistuntly
argued that imports must be rigidly controlled and that preference
should be given to the poorest countries, including India the EDC's
second largest supplier.
(c) The Commission's proposals do not discriminate against
Hong Kong. The other dominat suppliers, Korea and Taiwan are
treated equally severely.
(ii) Other products
We
know
7 The Commission has still not presented its detailed proposals for the other
products and we are unlikely to see these before the Governor's visit.
however that the Commission still interds to allow growth overall for
each supplier. When Mr Tran told Hong Kong officials, this in August they were
highly sceptical, and the figures that he gave them did not suggest that an
was possible overall average of 6% for Hong Kong. The Commission has now told the
Textiles Working Group how it believes that this can be done.
But the Commission
has still to finalise its own proposals and it would be unwise to be drawn into.
.3
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