TNAG-0631-FCO40-779-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 87

CONFIDENTIAL

15. SARDI (ITALY) SUPPORTED UK AND FRENCH REFERENCES TO THE IMPORT-

ANCE OF NOT EXCEEDING THE INTERNAL GLOBAL CEILINGS.

16. REPLYING TO THESE INTERVENTIONS TRAN SAID THAT THERE WAS NO

INTENTION ON THE PART OF THE COMMISSION TO USE TEXTILES AS A PREC- EDENT FOR OTHER AREAS OF COMMERCIAL POLICY (EG SHOES OR STEEL). HE QUERIED SCHEER'S SUGGESTION THAT 100% COVERAGE WAS NEEDED, ARGUING

THAT THIS WAS COMPLETELY UNREALISTIC. THE CENTRAL ISSUE WAS TO ACH-

IEVE SUCCESS BS NEGOTIATION IF AT ALL POSSIBLE. IT WAS OBVIOUSLY

PREFERABLE NOT TO ARRIVE AT A SITUATION WHERE AUTONOMOUS MEAS-

URES WERE NEEDED. BUT IF THESE WERE INTRODUCED THERE WAS NO QUESTION

OF SUBJECTING EFTA COUNTRIES OR NORTH AMERICAN AND JAPANESE EXPORT-

ERS TO THE SAME TREATMENT AS EXPORTS FROM DISRUPTIVE SUPPLIERS.

THERE HAD BEEN TALK OF USING GATT ARTICLE XIX. BUT CURRENT THINKING

IN THE COMMISSION AND HE STRESSED THAT THIS WAS AT AN EARLY STAGE

- WAS THAT THE NECESSARY HOLDING MEASURES COULD BE PUT INTO EFFECT

WITHOUT SPECIFIC REFERENCE TO ANY GATT ARTICLE. THEY WERE THINKING

IN TERMS OF HOLDING MEASURES TO CONTROL THE SITUATION WHILE THE

MFA WAS RENEGOTIATED, INITIALLY MPERHAPS FOR THREE TO SIX MONTHS, 17. 1973 HAD BEEN CHOSEN AS A BASE YEAR FOR CALCULATING MEASURES, TO BE APPLIED TO

COUNTRIES WHO FAILED TO REACH AGREEMENT WITH THE COMMUNITY BEC-

AUSE OTHER MORE OBVIOUS SOLUTIONS PRODUCED ANOMALIES E.G. IN THE CASE

OF INDIA COMPARED WITH BRAZIL.

18. TRAN EMPHASISED THAT THE COMMISSION HAD NOT IN ANY RESPECT

GONE BEYOND THE INTERNAL GLOBAL CEILINGS. THESE HAD BEEN VERY CARE-

FULLY HUSBANDED. THERE WERE SUFFICIENT RESERVES IN HAND. BUT THE

FACT HAD TO BE FACED THAT EVEN IF THE MAJOR NEGOTIATIONS WENT WELL

AT THE END OF THE DAY THERE WOULD STILL BE THE PROBLEM OF BRAZIL

AND THIS WOULD HAVE TO BE FACED LAST. THIS WAS A POLITICAL QUESTION.

HE CONCLUDED WITH A PLEA THAT THE COMMUNITY SHOULD NOT, IN THE

COURSE OF THIS EXERCISE, ALLOW ITS TRADITIONAL CONCERN FOR THE LEAST

DEVELOPED COUNTRIES TO BE OVERLOOKED. THE COMMUNITY HAD TO BE FAIR

TO THEM.

-5- CONFIDENTIAL

/COMMENT