CONFIDENTIAL
NOTE VERBALE OF 11 NOVEMBER WILL ALMOST CERTAINLY DRAW
A PUBLIC REBUTTAL FROM THE COMMISSION WITH A CONSEQUENT
HARDENING OF POSITIONS ALL ROUND THAT WE ALL WISH TO AVOID.
''
5. IN PARA 4 OF YOUR TELEGRAM, YOU REFER AGAIN TO YOUR OBJECTIONS TO
THE RE-DISTRIBUTION OF HONG KONG TRADE TO THE COMPETITORS ""
AS NOT BEING IN THE UK OR COMMUNITY INTERESTS. THERE ARE MANY
REASONS WHY WE CANNOT SEE THE POSITION IN THIS WAY AND THEREFORE
WHY THE HONG KONG COMMITMENT TO 1976 LEVELS WILL NOT MEET THE
COMMUNITY'S STABILISATION REQUIREMENTS.
6. THE COMMUNITY, WITH THE FIRM SUPPORT OF BRITISH MINISTERS,
HAS AGREED THAT LOW COST IMPORTS OF PRODUCTS IN THE MOST
SENSITIVE CATEGORY MUST BE CONTAINED WITHIN OVERALL CEILINGS.
IT IS NOT PRACTICABLY POSSIBLE FOR THE COMMUNITY TO CLOSE
ITS MARKET IN ADVANCE TO THE SMALL QUANTITIES OF IMPORTS
WHICH WILL INEVITABLY COME FROM INDIVIDUAL NEW SUPPLIERS
DURING THE PERIOD OF THE NEW AGREEMENT. CONSEQUENTLY, IN ORDER TO ENSURE THAT THE OVERALL CEILINGS ARE NOT EXCEEDED,
SOME ROOM MUST BE LEFT WITHIN THEM.
7: IN ALL ITS OTHER POLICIES, FROM WHICH IT IS NO LONGER
POSSIBLE TO ISOLATE TEXTILES, THE COMMUNITY HAS TRIED TO
TAKE A LINE CONSISTENT WITH THE WIDER REQUIREMENTS OF THE NORTH/SOUTH DIALOGUE AND THE PRESSURE ON DEVELOPED INDUSTRI- ALISED COUNTRIES TO OPEN UP THEIR MARKETS TO DEVELOPING
COUNTRIES. TEXTILES ARE THE FIRST STEP ON THE ROAD TO
INDUSTRIALISATION TAKEN BY MANY OF THEM. IN THIS TEXTILE CONTEXT, THE COMMUNITY HAS HAD TO TAKE ACCOUNT OF THE DIFFERENT LEVELS OF DEVELOPMENT AMONG THE SUPPLYING COUNTRIES. THIS
HAS MADE IT A POLITICAL IMPOSSIBILITY, WHICH ALL MEMBERS STATES SUPPORT, TO APPLY CUT BACKS BELOW 1976 LEVELS TO THE POOREST DEVELOPING COUNTRIES (GOP PER HEAD BELOW DOLLARS 280). IN ORDER THEREFORE TO ACHIEVE THE NECESSARY BREATHING SPACE FOR THE COMMUNITY'S OWN TEXTILE INDUSTRY BY
MEANS OF OVERALL CEILINGS, IT IS NECESSARY FOR THE THREE MOST ADVANCED SUPPLIERS, HONG KONG, SOUTH KOREA AND TAIWAN
TO ACCEPT SOME CUTS FROM 1976. LEVELS.
8. YOU WILL WISH TO KNOW THAT, IN RESPONSE TO MR DELL ON 10 NOVEMBER, M DAVIGNON SAID THAT THE COMMISSION WOULD NOT
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CONFIDENTIAL
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