TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 229

AUSTRY HO. ST

AFF ति

1325

CONFIDENTIAL

15 NOVIAT

GRS 622

FLASH

CYPHER/CAT A

FROM UKREP BRUSSELS 14173Z

CONFIDENTIAL

FRAME EXTERNAL

TO FLASH FCO TELNO 6813 OF 14TH NOVEMBER 1977.

TEXTILES: NEGOTIATIONS WITH HONG KONG.

YOUR TELNO 2698.

321

1. AFTER PRELIMINARY CONTACTS DURING THE WEEKEND, NICOLL AND ELLIOTT SAW TRAN AND BECK (COMMISSION) AT LUNCHTIME TODAY.

>

2. THE HONG KONG NOTE VERBALE HAS GREATLY ANNOYED THE COMMISSION, NOT LEAST BECAUSE OF ITS ASSERTION THAT THE COMMUNITY HAS 'ACCEPTED? HONG KONG'S COUNTER OFFER AS 'MEETING'' OUR STABILISATION REQUIREMENTS. BECK POINTED OUT CORRECTLY THAT IN THE

FORMAL NEGOTIATIONS WITH MILLS HE CONCEDED ONLY THAT THE HONG KONG OFFER ''RECOGNISES'' REPEAT RECOGNISES'' FOR THE FIRST TIME THE COMMUNITY'S PRINCIPLE OF STABILISATION AT 1976 LEVELS (OUR TELNO 6516 PARAGRAPH 3(B) REFERS). TRAN WAS THEREFORE SORELY TEMPTED EITHER TO REJECT THE NOTE OR TO SEND A CRISPLY WORDED REPLY. IN THE

END HOWEVER HE ALLOWED HIMSELF TO BE PERSUADED TO SEND NO

ACKNOWLEDGEMENT AT ALL FOR THE TIME BEING.

3. THAT SETTLED, WE DEBATED THE NEXT STEP. BY CONTRAST WITH HONG KONG'S COUNTER OFFER THE COMMISSION INSISTED THAT THEY HAD NEVER CHARACTERISED THE COMMUNITY'S OFFER AS A FINAL PROPOSAL: AND

THEY CONFIRMED THAT IT COULD INDEED BE IMPROVED IN THE COURSE OF SERIOUS NEGOTIATIONS. THIS OFFER, AS THE COMMISSION PRESS RELEASE SAYS, REMAINS ON THE TABLE. THE COMMISSION INSISTED HOWEVER THAT THEY SAW NOTHING TO BE GAINED BY REOPENING TALKS ON A FALSE PREMISE. UNLESS THERE IS TO BE A RADICAL DEPARTURE FROM THE MANDATE, HONG KONG MUST SWALLOW THE PRINCIPLE OF CUTBACKS AND ACCEPT THE COMM-

UNITY'S PRODUCT GROUPINGS.

CONFIDENTIAL

14.

WE