TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 191

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IMMEDIATE

CYPHER CAT A

GPS 250

FM FCO

1813052

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14KK 121

124/616/1

2?

¿No R$ 24/11

TO IMMEDIATE BTC HONG KONG TELEGRAM NO 88 OF 18 NOVEMBER 1977

FOR MARCH FROM STEWART

YOUR TELNO VTC 114 OF 9 NOVEMBER

30€

1. THE UK VETO ON THE COMMUNITY MANDATE WAS LIFTED ON 18 OCTOBER

WHEN AGREEMENT WAS REACHED ON ALL POINTS EXCEPT COTTON YARN IMPORTS. BI-LATERAL NEGOTIATIONS WITH HONG KONG OPENED ON

19 OCTOBER. HONG KONG PROPOSED USING EXPORT AS OPPOSED TO IMPORT CONTROL, CRITIZED EEC METHODOLOGY ON IMPORT PENE-

TRATION AND EXPRESSED SERIOUS RESERVATIONS ABOUT THE EFFECT OF THE PROPOSALS ON THE HONG KONG ECONOMY. DURING 27/28 OCTOBER

HONG KONG AGREED PRIVATELY TO WORK ON BASIS OF EEC FIGURES IN

RETURN FOR EMPLOYMENT OF EXPORT CONTROL TO MONITOR THE AGREEMENT,

CM 28 OCTOBER HONG KONG PRESENTED COUNTER PROPOSALS TO THE

COMMUNITY WHICH WERE ATTACKED FOR THEIR LACK OF FLEXIBILITY

AND THE INADEQUACY OF THEIR COVERAGE.

2. ON 4 NOVEMBER TRAN HELD A PRESS CONFERENCE DEMANDING AN

AGREEMENT WITH HONG KONG BY 10 NOVEMBER AND ACCUSED HONG KONG

OF LEADING AN ANTI-EEC FRONT AT GENEVA, HONG KONG REACTED VIOLENTLY, ACCUSING TRAN OF BEING THREATENING AND ATTACKING THEM DESPITE THE KNOWLEDGE THAT HONG KONG WAS ABOUT TO PRESENT

HER OWN PROPOSALS. THESE PROPOSALS ATTEMPTED TO BREAK DEADLOCK BY AGREEING TO THE EEC STABILISATION REQUIREMENTS. THE COMMISSION CLAIMED THE PROPOSALS IGNORED THE NEED FOR SACRIFICES FROM

DOMINANT SUPPLIERS, FAILED TO PROVIDE A SYSTEM FOR GROUPING PRODUCTS ACCORDING TO SENSITIVITY AND DID NOT USE THE NEW EEC

METHOD OF CATEGORISATION. ON 7 NOVEMBER HONG KONG, IN THEIR TURN,

ACCUSED THE COMMISSION OF REFUSING TO MAKE ANY CONCESSIONS AND

OF GIVING HONG KONG TRADE TO OTHER EXPORTERS. TRAN REPLIED BY MAINTAINING THAT THE EEC WOULD CUT THE RESERVE KEPT FOR HONG KONG,

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