TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 58

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3. TRAN (COMMISSION) PROPOSED OFFERING THE PERUVIANS TWO ALTERNATIVES

OR

(A) NO AGREEMENT AND THEREFORE UNILATERAL MEASURES FROM 1 JANUARY:

B) AN AGREEMENT BASED ON TWO ELEMENTS:

(1) A QUOTA OF 500 AND 200 TONNES RESPECTIVELY FOR NORMAL COTTON

YARN AND CLOTH FOR 1978 AND

(11) AN EXCHANGE OF LETTERS ON SPECIAL QUALITY COTTON YARN AND

CLOTH FOR WHICH THERE WOULD BE LIMITS OF 3,028 AND 1,590 TONNES RESPECTIVELY FOR 1978 CUTSIDE THE QUOTA, PROVIDED THAT IMPORTS WERE

NOT, REPEAT NOT, BELOW THE NORMAL COMMUNITY PRICE FOR THE SAME

PRODUCT.

IN THE ARTICLE 113 COMMITTEE MEETING, MOST MEMBER STATES EXPRESSED

DOUBT ABOUT THE COMMISSION'S PROPOSALS. THE BELGIANS POINTED OUT THAT

THERE WAS NO SPECIAL QUALITY COTTON CLOTH, ONLY YARN. MOST DELEGAT-

IONS AGREED THAT THE PROBLEM SHOULD BE PUT TO THE COUNCIL. TRAN SAID

THAT THE COMMISSION WAS NOT PREPARED TO RAISE IT AT THE COUNCIL:

THEY INTENDED TO EXECUTE THEIR NEGOTIATING MANDATE. 'EUROCOTON' HAD

TOLD HIM PRIVATELY THAT THEY WOULD BE SATISFIED WITH THIS SPECIAL

ARRANGEMENT FOR QUALITY COTTON AND CLOTH PROVIDED THAT IT DID NOT UNDERCUT THE COMMUNITY'S INDUSTRY IN TERMS OF PRICE. AGREEMENT WAS SUBSEQUENTLY CONCLUDED (ALTHOUGH THE TERMS ARE NOT YET KNOWN);

SEE PARA 11 BELOW.

KORE^

4. MY TELNO 7336 (NOT TO ALL) REFERS. FOLLOWING A MEETING BETWEEN THE KOREANS AND COMMISSIONER DAVIGNON, THE KOREANS NOW HAVE UNTIL MIDDAY TODAY TO ACCEPT THE COMMISSION'S OFFER OR TO FACE IMMEDIATE

AUTONOMOUS MEASURES WITH A 20% CUTBACK. THE COMMISSION ARE CONFIDENT

THAT THE KOREANS WILL SIGN..

HONG KONG

i.

5. AFTER A WEEK OF INFORMAL DISCUSSIONS, HONG KONG RETURNED TO FOR-

MAL DISCUSSIONS ON 23 NOVEMBER, AGREEMENT HAS BEEN REACHED WITH THEM

CN BASE LEVELS AND GROWTH RATES FOR NEARLY ALL PRODUCTS IN GROUPS

111 AND IV. HOWEVER, WHEN CONFRONTED WITH A NEW COMMUNITY REQUEST IN CATEGORIES 2 AND 3, (COTTON AND SYNTHETIC CLOTH) FOR AN INNER

STOP FOR OTHER THAN GREY OR BLEACHED CLOTH THE HONG KONG DELEGATION

WALKED OUT IN ANGER. THE COMMISSION NEGOTIATOR IS NOW DISCUSSING

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