TNAG-0631-FCO40-779-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 63

CONFIDENTIAL

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MILLS (HONG KONG) REPLYING WITH ARGUMENTS CLOSE TO THOSE USED

IN HONG KONG TELNO 1098, SAID THAT HE WAS INSTRUCTED TO EMPHASIZE

CONTINUALLY THAT HONG KONG'S OFFER REPRESENTED THE FURTHEST THEY

COULD GO. THE FACT THAT THE COMMUNITY WERE NOW ABLE TO ACCEPT HONG

KONG'S INSISTENCE ON AN EXPORT AUTHORIZATION APPROACH COULD SCAR-

CELY BE REGARDED AS A CONCESSION: HONG KONG REGARDED THIS AS A RIGHT.

HONG KONG'S PACKAGE MET MOST OF THE COMMUNITY'S REQUIREMENTS: IT

BROUGHT UNDER SURVEILLANCE ALL TEXTILE PRODUCTS: IT BROUGHT UNDER

SPECIFIC CONTROL ALL THE PRODUCTS ON WHICH COMMUNITY WAS ASKING

FOR RESTRAINTSN BOTH AT THE COMMUNITY AND THE REGIONAL

LEVEL, WITH THE EXCEPTION OF COTTON YARM (ON WHICH THERE COULD BE A FORMULA TO BE WORKED OUT IN INFORMAL DISCUSSIONS): IT MET US ON

STABILISATION, AND THUS ON PROTECTION FOR OUR DOMESTIC INDUSTRIES,

THE COMMUNITY'S CATEGORIZATION SYSTEM WOULD CREATE ENORMOUS DIFFIC

ULTIES FOR HONG KONG, AND MONTHS OF TRANSITION WOULD BE NECESSARY IF

WE WERE TO INSIST ON IT. HONG KONG COULD GO A LONG WAY TO MEET THE

COMMUNITY, BUT OBJECTED FUNDAMENTALLY TO THEIR PROPOSALS IN SO FAR

AS THEY REDISTRIBUTED HONG KONG'S TRADE TO OTHER SUPPLIERS. FINALLY

THE COMMUNITY MUST APPRECIATE HONG KONG'S WORRY THAT ANY RESTRICTIVE

AGREEMENT REACHED WITH THE COMMUNITY WOULD PROVOKE MATCHING

DEMANDS FROM HONG KONG'S OTHER TRADE PARTNERS, NOTABLY THE USA.. HONG KONG WAS THEREFORE, IN THESE NEGOTIATIONS, PUTTING ITS ENTIRE

TEXTILE INDUSTRY IN JEOPARDY.

ALPIND

6. FOLLOWING THESE INITIAL STATEMENTS OF POSITION, THE COMMISSION

SUGGESTED THAT THE NEGOTIATIONS SHOULD NEXT CONCENTRATE ON FIGURES,

BECK SHOWED THE HONG KONG DELEGATION THE TYPE OF MEMORANDUM OF UNDER-

STANDING WHICH HAD BEEN INITIALLED WITH OTHER DELEGATIONS PENDING

FINAL AGREEMENT, BUT AFTER AGREEMENT ON THE ESSENTIAL FIG-

URES: AND HE GAVE THE HONG KONG DELEGATION A NEW PIECE OF PAPER

SHOWING THE COMMUNITY'S OFFER (IN ITS MOST RECENT STATE, SLIGHTLY REDUCED FOR CERTAIN PRODUCTS) ON GROUP 1 PRODUCTS, BROKEN DOWN

AS HONG KONG HAD EARLIER REQUESTED BY MEMBER STATES. MILLS CRITIC-

IZED THESE FIGURES: THEY OFFERED NO IMPROVEMENT, AND IN SOME CASES

A DETERIORATION ON THE COMMUNITY'S OFFER. IN THE LIGHT OF THE EFFORTS

SYMBOLIZED BY HONG KONG'S NEW OFFER, THE COMMUNITY SHOULD REFLECT

FURTHER ON THESE FIGURES. MEANWHILE HE SUGGESTED THAT THERE WERE MANY

OTHER UNRESOLVED AREAS THAT COULD BE DISCUSSED. THE COMMISSION

DISMISSED THIS ORDER OF PROCEEDING ARGUING THAT HONG KONG SHOULD

STUDY THE COMMUNITY'S OFFER SERIOUSLY.

AFTER

17.

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