TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 107

Cutbacks

ลง

Hong Kong has long held fundamental objections to

any cutbacks in existing restraint levels, for which there is naturally no provision in an international arrangement designed to achieve the expansion of trade, reduction of barriers to trade and progressive liberalisation of world trade in textile

products.

2.

Hong Kong's current textiles agreement with the EEC

was concluded having regard to the MTA and in particular its Article 4. It seems reasonable to assume that any new agreement will also be regarded as having been concluded under Article 4

of the MFA.

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3.

Paragraph 3 of Article 4 provides that "bilateral

agreements maintained under this Article shall, on overall terms, including base levels and growth rates, be more liberal than measures provided for in Article 3 ...". This implies that an Article 4 agreement does not necessarily have to be more liberal than Article 3 provisions in every respect, provided that the

overall terms are more liberal.

4.

Paragraph 8 of Article 3 read with Annex B provides

that, where restraint measures remain in foro, for subsequent twelve-month periods, there must each year be at least 6% growth or, in certain circumstances, a lower positive growth, on the

previous restraint level.

5.

It is clear from these provisions that, though the

rate of growth may be modified in exceptional circumstances,

cutbacks in existing restraint levels are not permitted under

Article 3. Even in the most exceptional circumstances there

must still be positive growth when a restraint is renewed or

extended.

6.

In view of this and of the phrase "overall terms,

including base levels and growth rates", it is difficult to see

how any measures that involved a reduction in base levels, which

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