TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 148

CONFIDENTIAL

H.KK 121/616

926

IMMEDIATE

DESKBY 251208Z

CYPHER/CAT A

FM UKREP BRUSSELS 241748Z

CONFIDENTIAL

FRAME EXTERNAL

DESK BY 251000Z

TO IMMEDIATE FCO TELEGRAM NUMBER 7187 OF 24 NOVEMBER

INFO SAVING UKMIS GENEVA.

TEXTILES:

1.

NEGOTIATIONS WITH HONG KONG

WE HAD A PRIVATE MEETING WITH BECK (COMMISSION) THIS MORNING AT HIS INVITATION. REPRESENTATIVES OF CT AND CRE1 WERE ALSO PRESENT. BECK GAVE US A PROGRESS REPORT ON THE RESUMED NEGOTIATIONS WITH HONG KONG AND TOOK US THROUGH A DETAILED DISCUSSION OF THE FIGURES ON WHICH HE HOPED WE WOULD BE ABLE TO

SHOW SOME FLEXIBILITY IN ORDER TO REACH A SOLUTION. BECK PROFESSED HIMSELF BROADLY CONTENT WITH THE OUTCOME OF THIS

DISCUSSION AND WILL NOW ENGAGE IN SIMILAR BILATERAL NEGOTIATIONS WITH OTHER MEMBER STATES BEFORE TRYING TO SEW-UP A PACKAGE WITH

HONG KONG BY THE WEEKEND. ONCE THERE IS AGREEMENT ON THE FIGURES

THE COMMISSION WILL MOVE ON TO DISCUSS WITH THE HONG KONG DELEGATION THE OTHER DETAILS OF THE AGREEMENT, NOTABLY THE PROVISIONS FOR EXPORT CONTROL AND EXPORT AUTHORISATION, FOR FLEXIBILITY AND

FOP THE TRANSITIONAL PERIOD.

2.

BECK SAID THAT INFORMAL CONTACTS HAD RESUMED ON MONDAY

EVENING AS SOON AS THE HONG KONG DELEGATION HAD RETURNED TO BRUSSELS . THE ATMOSPHERE HAD AT FIRST BEEN DIFFICULT AND

FRAUGHT WITH SUSPICION. BUT IT HAD QUICKLY IMPROVED WHEN THE

HONG KONG DELEGATION REALISED THAT THE COMMUNITY'S OFFER STILL

CONTAINED SOME FLEXIBILITY - INDEED, MORE THAN THEY HAD PERHAPS EXPECTED. AS THE COMMISSION NOW READ THE SITUATION, THE

INSTRUCTIONS OF THE HONG KONG DELEGATION ARE SUCH AS TO LEAVE

THEM TO SEEK AN AGREEMENT. AT THE SAME TIME IT WAS EVIDENT THAT

THEY WERE NOT PREPARED TO AGREE AT ANY PRICE, ON THE FIGURES

VEDENTIAL

| HONG