TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 73

COTTON AND DISCONTINUCUS SYNTHETIC FIBRES, INCLUDED PROVISION FOR

A POSSIBLE SUB-LIMIT ON FABRICS OTHER THAN GREY AND BLEACHED BUT

IN THIS SET OF TABLES ALL THE COLUMNS FOR THE INSERTION OF LIMITS

HAD BEEN LEFT BLANK. AT THIS STAGE THEREFORE IT APPEARED THAT

B-LIMITS MIGHT BE SOGHT. HOWEVER ON 7 NOVEMBER THE COMMUNITY

SUPPLIED A SET OF TABLES UNDER THE HEADING 'TEXTILE NEGOTIATIONS

PROPOSALS CONFIRMED 7 NOVEMBER 1977'. IN THESE TABLES PROPOSED

LIMITS FOR ALL CATEGORIES AND ALL MEMBER STATES ARE SHOWN. THERE

IS NO INDICATION WHATEVER OF ANY SUB-LIMITS WITHIN CATEGORIES 2

AND 3. AT A FORMAL SESSION ON 8 NOVEMBER THE COMMISSION CONFIRMED

THAT IT HAD COMPLETED ITS PROPOSALS ON THE LIMITS. UNTIL YESTERDAY

NO MENTION WHATEVER HAD BEEN MADE BY ANY COMMUNITY REPRESENTATIVE

IN ANY DISCUSSIONS FORMAL OR INFORMAL OF ANY PROPOSAL FOR A SUB-

LIMIT IN EITHER OF CATEGORIES 2 OR 3.

7. WE HAD UNDERSTOOD THAT, IN SOME COMPENSATION FOR THE SHARP CUTBACK ON COTTON FABRICS, WE WERE BEING OFFERED SLIGHTLY LESS RESTRICTIVE CONTROL ARRANGEMENTS THAN WE HAVE UNDER THE CURRENT AGREEMENT. THE LATEST PROPOSITION IS THAT, IN ADDITION TO THE CUTBACK, WE SHOULD HAVE EVEN MORE RESTRICTIVE ARRANGEMENTS THAN WE HAVE UNDER THE CURRENT AGREEMENT FOR THE USE OF OUR LIMITED EXPORT OPPORTUNITIES.

8.

THIS DEVELOPMENT IS NOT ONLY A SETBACK TO US. IT IS A

SETBACK TO THE WHOLE IDEA OF NEGOTIATION. WE CAN NOW HAVE NO

CONFIDENCE THAT ANYTHING THE COMMUNITY HAS SAID CAN BE RELIED ON.

THIS HAS

9. OUR ADVISERS HAVE ALREADY REACTED MORE ADVERSELY TO THE SHARP CUTBACKS ON COTTON FABRICS THAN TO ANYTHING ELSE THAT THE COMMUNITY INTENDS TO IMPOSE ON US (EXCEPT PERHAPS THE PROPOSAL ON TROUSERS WHICH HAS REPERCUSSIONS FOR THE WHOLE TEXTILE INDUSTRY FROM SPINNING THROUGH WEAVING TO GARMENT MANUFACTURE). BEEN DISCUSSED IN PREVIOUS TELEGRAMS. THIS NEWEST PROPOSAL ADDS

NOT INSULT BUT INJURY TO INJURY. EVEN IF THE PROPOSAL WAS NOT ORIGINATED BY THE U.K., IF IT IS PROCEEDED WITH IT WILL AFFECT PRINCIPALLY OUR EXPORTS TO THE U.K. IT SEEMS HARDLY NECESSARY TO REPEAT THE EFFECTS THIS IS LIKELY TO HAVE IN HONG KONG.

ENDS.

FCO PLEASE PASS TO HONG KONG GOVERNMENT OFFICE LONDON.

OY PASSED BY C.O.D.]

MUIRHEAD

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