TNAG-0631-FCO40-779-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 131

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TO IMMEDIATE F.C.O TELNO.1058 OF 26 OCTOBER, INFO PRIORITY BRUSSELS (FOR BURGESS),

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ROUTINE STOCKHOLM, OTTAWA, UKMIS GENEVA (FOR TSAO), WASHINGTON (FOR CROWSON), HONG KONG GOVERNMENT OFFICE LONDON,

YOUR TELNO.793 OF 18 OCTOBER: TEXTILES.

1. AS ANTICIPATED IN PARA.2 OF MY TELNO.1043 OF 18 OCTOBER, WE HAVE NOW RECEIVED AN OFFICIAL REQUEST FROM SWEDEN FOR CONSULTATIONS ON A NEW TEXTILES AGREEMENT. THE KEY PARAGRAPH READS: IN ORDER TO AVOID DAMAGE TO SWEDEN'S MINIMUM VIABLE PRODUCTION OF TEXTILES, THE SWEDISH GOVERNMENT FINDS IT NECESSARY TO NEGOTIATE IN THE FUTURE RESTRAINT AGREEMENTS OF A MORE COMPREHENSIVE NATURE, COVERING ALL SENSITIVE PRODUCTS. IN THE CASE OF DOMINANT SUPPLIERS, DEPARTURES FROM THE MFA WILL HAVE TO INCLUDE A REVISION OF BASE LEVELS...

2. WE HAVE ALSO LEARNT FROM THE CANADIANS THAT THEY HAVE IN MIND SEEKING EXTENSIVE RESTRAINTS AT LIMITS BASED ON ACTUAL 1975 (REPEAT) 1975 TRADE, 1.E AT LEVELS WHICH, IN HONG KONG'S CASE, WERE WELL BELOW THOSE OBTAINING IN NOVEMBER 1976 WHEN THE CANADIANS TOOK THEIR CURRENT ARTICLE XIX ACTION.

MACLEHOSE