TNAG-0631-FCO40-779-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 59

GR 500

IMMEDIATE

CYPHER/CAT A

FM UKREP BRUSSELS 081181Z

CONFIDENTIAL

CONFIDENTIAL

HKK 12

76.16/1

9 NOV 19/7

INDEX

PA

31

RC ISTRY

Pohon Tuke

FRAME EXTERNAL

π

goove

TO IMMEDIATE FCO TELEGRAM NUMBER 6627 OF 8 NOVEMBER

INFO IMMEDIATE UKMIS GENEVA

TEXTILES: NEGOTIATIONS WITH HONG KONG

MY TELNO 6616

PA

299

298

R2

300

1. AS REPORTED TO EID BY TELEPHONE, TRAN VAN THIN (COMMISSION) RANG COUNSELLOR EXTERNAL TRADE THIS MORNING TO WARN THAT A BREAKDOWN IN THE NEGOTIATIONS WITH HONG KONG WAS NOW INEVITABLE UNLESS THE HONG KONG TEAM SHOWED WILLINGNESS TODAY TO NEGOTIATE ON THE BASIS OF THE

COMMUNITY'S FIGURES.

2. TRAN ARGUED THAT:-

(1) A NUMBER OF DEVELOPING COUNTRY SUPPLIERS (PLUS YUGOSLAVIA) WERE MANOEUVRING IN GENEVA TO ARRAIGN THE COMMUNITY BEFORE A MEETING OF THE TEXTILES COMMITTEE, WHICH THEY HOPED TO CONVENE ON WEDNESDAY 9 NOVEMBER. IF HE COULD NOT SETTLE WITH HONG KONG ON THE COMMUNITY'S TERMS, HE WOULD NEED TO USE SOME OF THE IMPORT POSSIBILITIES INTENDED FOR HONG KONG TO BUY OFF SUCH SUPPLIERS AS MEXICO, PERU, PAKISTAN,

SRI LANKA AND BRAZIL.

(11) HONG KONG HAD NOT NEGOTIATED IN GOOD FAITH. TRAN READ OUT THE RECORD OF AN INTERNAL NOTE EXCHANGED WITH MILLS ON 26 OCT- OBER UNDER WHICH THE TWO SIES AGREED THAT HONG KONG WOULD ACCEPT THE COMMUNITY'S PROPOSALS AS THE BASIS FOR NEGOTIATION IN EXCHANGE FOR ASSURANCES THAT THEY COULD CONTINUE TO OPERATE ON THE BASIS OF EXPORT CONTROL. THIS ASSURANCE HAD BEEN GIVEN BY THE COMMUNITY BUT THE HONG KONG SIDE HAD.NOW REFUSED TO TALK ABOUT THE COMMUNITY'S FIGURES, HAD REJECTED CUT BACKS FROM 1976 BASE LEVELS AND THE COMM- UNITY'S SYTEM OF CLASSIFICATION, AND HAD CHARACTERISED THEIR MOST RECENT PROPOSALS AS THEIR FINAL OFFER.

/(111) WHEN

CONFIDENTIAL