2
in itself involves negative growth, could be regarded as meeting
the requirements of Article 4.
7.
Hong Kong is aware that in its statement at the
Textiles Committee meeting in July 1977, one of the EEC's
"requests" in negotiating the renewal of the MFA was to seek
the agreement of exporting countries, especially the "large ones, not to invoke the provisions in paragraph 1(b) of Annex B
relating to restraint levels for continuing restraints. But the
Community was unable to obtain the agreement of the participating
countries to this proposal.
8.
At that Textiles Committee meeting, it was Hong Kong
which referred to the "possibility of jointly agreed reasonable departures from particular elements of the MFA 7, provided
the outcome is one which meets the criteria set out in Article 4".
In making such a statement, Hong Kong was doing no more than
reaffirming its past and present practice, having conceded in
1975 very low growth rates of 0.5% in many cases, and swing of only 5% in some cases, under its current agreement with the EEC, and having just concluded a new agreement with the USA also providing for growth rates lower than 6%.
9.
Reductions in base levels are, however, a very
different matter. Hong Kong would find it difficult to see how
such measures could be shown to be necessary in an agreement whose purpose is merely to contime to avoid real risks of
market disruption.
10.
It has not been suggested that these cutbacks are
Bought for that purpose. The stated purpose is to provide
access to the EC market for 'newcomers and 'small suppliers'.
11.
1
This goes beyond the area of "jointly agreed reasonable departures from particular elements" of the MFA into the field
of major changes to the Arrangement; and ignores the fact that the majority of the participating countries made it clear in the Textiles Committee that they were not prepared to consider
such changes to the Arrangement.
/12.
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