TNAG-0631-FCO40-779-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 84

CANE IDENTIAL

3. IF THERE WERE NO PROPER AGREEMENT BY THE END OF NOVEMBER WITH

THE PREFERENTIAL COUNTRIES, THE COMMUNITY WOULD HAVE TO AND NCE ITS OWN LIMITS UNILATERALLY. IF THE PREFERENTIAL COUNTRIES FAILED

TO RESPECT THESE LIMITS THE SAFEGUARD CLAUSES IN THE ASSOCIATION

AGREEMENTS WOULD HAVE TO BE INVOKED. (IN THE CASE OF GREECE THE

ABSENCE OF A SAFEGUARD CLAUSE FOSED PARTICULAR PROBELMS AND ANY

ATTEMPT BY THE COMMUNITY TO RESTRICT COTTON YARN IMPORTS MIGHT HAVE

WIDER POLITICAL CONSEQUENCES).

4. THE INDIANS WERE DIFFICULT NEGOTIATING PARTNERS AND WERE CHALLENG-

ING THE LEGALITY OF THE NEGOTIATIONS THEMSELVES. THEY WERE NOT

PREPARED TO COME BACK TO NEGOTIATE UNTIL 14 NOVEMBER, AND THIS

TIMING ALONE WOULD POSE PROBLEMS. THE CASE OF INDIA THREATENED TO

ASSUME A POLITICAL DIMENSION AND THE COMMISSION WOULD FURNISH REG-

ULAR REPORTS TO MEMBER STATES.

55. THE CASE OF BRAZIL WAS ALREADY HIGHLY POLITICAL. ON THE PRESENT BASIS THERE WAS PRACTICALLY NO CHANCE OF AN AGREEMENT BEING REACHED.

ONLY AT THE END OF THE MONTH, WHEN NEGOTIATIONS HAD (THEORETICALLY)

BEEN CONCLUDED WITH ALL OTHER NEGOTIATING PARTNERS, WOULD IT BE

POSSIBLE TO SEE HOW TO DEAL WITH BRAZIL. THIS WAS A PROBLEM WHICH THE

COUNCIL WOULD HAVE TO FACE.

6. TRAN WENT ON TO DESCRIBE THE PREPARATIONS NOW IN HAND FOR BRING-

ING IN AUTONOMOUS MEASURES IN THE EVENT OF FAILURE OR PARTIAL

FAILURE OF THE BILATERAL NEGOTATIONS. HE STRESSED THAT THIS APPROACH

WAS INTENDED BY THE COUNCIL TO RUN PARALLEL TO THE BILATERALS AND

WAS AN INTEGRAL PART OF THE MANDATE. INTERNALLY THE COMMISSION ENVISAGED USING REGULATIONS 1439/74 AND 109/70 AS THE BASIS FOR

PROPOSALS TO THE COUNCIL FOR NEW REGULATIONS TO COVER ALL TEXTILE

IMPORTS. IN THE CASE OF COUNTRIES WHICH HAD NOT CONCLUDED AGREE-

MENTS WITH THE COMMUNITY THESE REGULATIONS WOULD LAY DOWN GROWTH

RATES FOR IMPORTS TAKING 1973 AS A BASE LEVEL AUGMENTED BY ANNUAL

INCREMENTS OF 6%. FOR COUNTRIES WHICH HAD REACHED AGREEMENT WITH

THE COMMUNITY THE REGULATIONS WOULD EMBODY THE ECONOMIC CONTENT OF

THESE AGREEMENTS. EXTERNALLY THE COMMUNITY WOULD NEED TO REQUEST

A MEETING OF THE TEXTILE COMMITTEE IN GENEVA IN ORDER THERE TO SET

OUT THE AMENDMENTS THE COMMUNITY NEEDED TO THE MFA. THIS WOULD BE A

SLOW PROCESS. IN THE MEANTIME, AS A HOLDING ACTION AND TO PREVENT

ANY LEGAL VACUUM ON 1 JANUARY 1978 THE INTERNAL MEASURES DESCRIBED

ABOVE WOULD BE INTRODUCED,

-2- CONFIDENTIAL

17.