TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 120

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PRIORITY

CYPHER CAT A

FM UKMIS GENEVA 291735Z

RESTRICTED

FRAME EXTERNAL

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TO PRIORITY FCO TELNO 631 OF 29 NOVEMBER

INFO UKREP BRUSSELS

GATT: TEXTILES COMMITTEE

HKK 121 616/1

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No 132/14

F

1. AT THIS MORNINGSS OPENING SESSION OF THE CONTRACTING PARTIES THE KOREANS, TO THE APPARENT SURPRISE OF THEIR TEXTILE EXPORTING COLLEAGUES, LAUNCHED A BRIEF BUT PUNGENT DISCUSSION OF THE STYLE AND SUBSTANCE OF THE COMMUNITY'S NEGOTIATIONS.

2.

368

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KOREA THOUGHT THAT THE TEXTILES COMMITTEE NEXT WEEK SHOULD TAKE UP THE ISSUES OF PRINCIPLE AND PRACTICE RAISED BY THE EFFORTS OF QUOTE A CERTAIN TRADING BLOC UNQUOTE TO DICTATE ITS OWN TERMS TO ITS PARTNERN IN WHAT PURPORTED TO BE A NEGOTIATION BUT WAS LITTLE MARE THAN A DIKTAT. INDIA, JAPAN, HONG KONG, PERU AND BRAZIL TOOK UP THE REFRAIN. INDIA, WITHOUT MENTIONING THE COMMUNITY AS SUCH, EXPRESSED GRAVE FOREBODINGS AT THE NEW PHILOSOPHY AND QUOTE RULES

UNQUOTE WHICH APPEARED TO BE EVOLVING AND WHICH WERE AGAINST

ECONOMIC LOGIC, AGAINST THE PRINCIPLE OF COMPARATIVE ADVANTAGE - AND TOTAL CONTRADICTION TO THE FORM, FRAMEWORK, LETTER AND SPRIT OF THE MFA. ALL OF THIS, AND PARTICULARLY THE DANGEROUS CONCEPT OF IMPORT PENETRATION, HAD GRAVE IMPLICATIONS FOR THE TRADING

SYSTEM AT LARGE. IT WAS ESSENTIAL THAT THE TEXTILES COMMITTEE

SHOULD ADDRESS ITSELF TO THESE DANGERS. HONG KONG (TSAO) DID

NOT WISH TO PRE-JUDGE THE OUTCOME OF THE ONGOING REGOTIATIONS

WITH A CERTAIN EUROPEAN ENTITY, BUT COMPLAINED THAT IT WAS NOT

CO MUCH A MEGITIATION AS A SET OF DEMANDS BACKED UP BY THREATS.

THE DEMANDS THEMSELVES, IF ACCEPTED, WOULD REPRESENT SUCH A

DEROGATION FROM THE MEA AS TO MAKE IT A DEAD LETTER, INSULT WAS

BEING ADDED TO INJURY BY THE THREAT THAT IF THE EXPORTERS DID NOT

SETTLE FOR WHAT WAS ON OFFER THEY WOULD BE SUBJECTED TO EVEN MORE

DRASTIC TREATMENT. THE TEXTILES COMMITTEE WOULD BE MEETING AT A

SORT OF CROSSROADS IN THE UNFOLDING OF EVENTS AND SHOULD CONSIDER

THE INPLICATIONS OF WHAT WAS HAPPENING FOR THE OPEN INTERNATIONAL

TRADING SYSTEM. IT MIGHT PE THAT THE STRONG COULD FORCE UNEQUAL

TREATIES ON THE WEAK. THE QUESTION WAS WHETHER IN THE PROCESS

INTERNATIONAL OBLICATIONS MUST NOT BE TOTALLY DEVALUED.

DESTRIA

13.

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