TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 151

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TO PRIORITY BONN TELNO 662 OF 23 NOVEMBER

INFO PRIORITY UKREP. BRUSSELS, COLOMBO,

TEXTILES: SRI LANKA.

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1. THE SRI LANKA FOREIGN MINISTER, MR ABDUL HAMEED, CALLED ON ME ON 23 NOVEMBER TO PRESENT ONCE AGAIN HIS COUNTRY'S CASE ON THE BILATERAL TEXTILE NEGOTIATIONS NOW IN PROGRESS IN BRUSSELS BETWEEN THE COMMUNITY AND SRI LANKA,

2. MR HAMEED ARGUED THAT SPECIAL TREATMENT SHOULD BE GIVEN TO SRI LANKA, WHO IS TRYING TO DEVELOP HER TEXTILE EXPORTS, PARTICULARLY OF SHIRTS AND BLOUSES, BECAUSE OF HER POVERTY, HER DEMOCRATIC STATUS AND THE FACT THAT SHE HAD NOW RETURNED TO A FREE MARKET ECONOMY AND RELAXED HER CONTROLS ON COMMUNITY INDUSTRIAL IMPORTS.

3. 1 EXPRESSED SYMPATHY FOR SRI LANKA'S DIFFICULT SITUTATION. SHE WAS TRYING TO EXPAND HER TEXTILE INDUSTRY AT THE SAME TIME THAT THE IMPORTING COUNTRIES WERE TRYING TO RESTRICT LOW COST IMPORTS. I UNDERLINED THAT UK MINISTERS COULD NOT AGREE TO ANY IMPROVEMENT IN THE OFFER BEING MADE TO SRI LANKA WHICH WOULD INVOLVE AN INCREASE IN THE COMMUNITY'S INTERNAL GOLBAL IMPORT CEILINGS FOR GROUP 1 PRODUCTS. THE ONLY WAY TO HELP SRI LANKA WAS THEREFORE TO REDUCE THE OFFER MADE TO OTHERS. THIS WAS DIFFICULT BECAUSE NEGOTIATIONS HAD ALREADY REACHED AN ADVANCED STAGE AND THE UK'S ABILITY TO AFFECT MATTERS WAS SEVERELY LIMITED. MOREOVER, THE CUTS PROPOSED FOR HONG KONG, SOUTH KOREA AND TAIWAN WERE ALREADY SEVERE. NONETHELESS WE HAD OF COURSE A SPECIAL INTEREST IN THE TREATMENT OF COMMONWEALTH COUNTRIES.

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14. MR HAMEED