TNAG-0631-FCO40-779-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 50

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4. IN RESPONSE, OUR MAJOR CONCESSIONS HAVE BEEN REJECTED, SOLELY BECAUSE OF (F), AND WE HAVE BEEN SUBJECTED TO THE EXTRAORDINARY THREAT OF GRADUALLY MOUNTING (WEEK BY WEEK) PUNITIVE REDUCTIONS

IN THE COMMUNITY OFFER (UNIMPROVED AND INDEED VIRTUALLY UNCHANGED SINCE IT WAS MADE RIGHT AT THE START) IF WE DO NOT

CONCEDE.

5. THERE IS NO QUESTION OF ALL BEING WELL IF THE ATMOSPHERE

IS COOLED''. ATTENTION HAS BEEN FOCUSSED ON THE POINTS OF DIFFERENCE, BUT THERE IS NO EVIDENCE WHATEVER THAT THEY ''ARE NARROWING SUBSTANTIALLY''. SUCH NARROWING HAS HAS TAKEN

PLACE HAS BEEN ENTIRELY THE RESULT OF HONG KONG MOVING, THE

EEC, FAR FROM MAKING A RECIPROCAL MOVE TOWARD US, HAS ADJOURNED

THE NEGOTIATIONS INDEFINITELY AND DONE SO WITH THE THREATS

MENTIONED IN PARA 4 ABOVE.

6. UNLESS THE THREAT IS WITHDRAWN I SEE NO ALTERNATIVE TO

RECALLING OUR DELEGATION BEFORE THE END OF THE WEEK. THERE IS

NO POINT IN THEIR STAYING ON ANY LONGER IN SUCH CIRCUMSTANCES.

THIS WITHDRAWAL WOULD HAVE TO BE ANNOUNCED HERE NO LATER THAN TOMORROW (10 NOVEMBER).

7. HOWEVER, IF THE COMMUNITY SHOWS ITSELF READY TO RENEW NEGOTIATIONS ON A FAIR AND REASONABLE BASIS, THEY CAN BE RESUMED LATER THIS MONTH, POSSIBLY AFTER A MEETING OF THE

GATT TEXTILE COMMITTEE.

8. IN ANY CASE, JORDAN WILL BE IN EUROPE FOR A FEW MORE DAYS

AND CAN BE CONTACTED THROUGH OUR BRUSSELS OFFICE.

MACLEHOSE

FILES HK & GD (5) EID (E) MR MURRAY MR HIBBERT

MR FRETWELL

MR CORTAZZI

MR BUTLER MR THOMAS

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