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CONFIDENTIAL
(C) ECONOMICALLY AND POLITICALLY, COTTON YARN AND COTTON CLOTH GAVE
US THE GREATEST DIFFICULTIES. WE HAD EMPHASISED THIS THROUGHOUT
THE PREPARATIONS OF THESE NEGOTIATIONS. WE HAD THOUGHT THAT WE
WERE GOING TO BE HELPED AND HAD LOOKED TO HAVE NO GROWTH IN
IMPORTS OF COTTON YARN BUT AS WE NOW UNDERSTOOD IT WE WERE BEING
ASKED TO TAKE IN 1978 A GROWTH OF 5.6 PER CENT IN COTTON YARN
COMPARED WITH 1976, AND OF 3.0 PER CENT IN COTTON CLOTH. HE
THEREFORE DID NOT UNDERSTAND THE REFERENCE IN THE COMMISSION'S
REPORT THAT FOR COTTON FABRIC THE CUTS IMPOSED ON HONG KONG,
KOREA AND TAIWAN WOULD MEAN A REDUCTION OR STABILISATION OF
IMPORTS IN RELATION TO 1976 SURVEILLANCE, FOR A NUMBER OF MEMBER
STATES NOTABLY THE UK. IF THERE WERE SOME EXCESSES IN THE CASE
OF COTTON CLOTH IT MIGHT BE USEFUL TO HAVE OFFICIALS NOW EXAMINE
THE PROBLEM. FOR THE MOMENT HOWEVER HE COULD NOT GIVE HIS
ASSENT TO THE COMMISSION'S PROPOSALS,
12. REPLYING, DAVIGNON AGREED THAT A DOCUMENT WOULD BE PREPARED THIS
EVENING INTENDED TO SHOW HOW IN PRACTICE GREATER SECURITY COULD BE
OBTAINED, IN THE LATER YEARS OF THE AGREEMENT WITH THE MEDITERRANEAN SUPPLIERS. HE WAS ALSO READY TO CIRCULATE A PIECE OF PAPER SPELL-
ING OUT IN GREATER DETAIL THE COMMISSION'S WILLINGNESS TO APPLY THE
TRIGGERS AGAINST NEWCOMERS NOT ONLY ON A COMPARABLE BASIS TO THE
PROVISIONS NEGOTIATED INTO THE AGREEMENTS BUT ALSO SPEEDILY, ON THE
FRENCH SUGGESTION THAT THE BURDEN-SHARING FORMULA COULD BE REVIEWED
IN THE EVENT OF SURGES IN ACP EXPORTS HE DREY DENIAU'S ATTENTION TO LANGUAGE ON PAGES 6-7 OF DOCUMENT S/2115/77 JUST CIRCULATED.
HE WAS ALSO PREPARED FURTHER TO REVISE THE LANGUAGE ON PAGE 6 ABOUT
RULES OF ORIGIN TO HELP THE ITALIAN DELEGATION.
13. HE QUERIED MR DELL'S ASSERTION THAT THERE WAS STILL UNCERTAINTY
OVER THE FIGURES. THE FIGURES FOR PRODUCTS IN GROUP 1 WERE ENTIRELY
CLEAR AND THIS GROUP COVERED 60 PER CENT OF IMPORTS FROM LOW COST
SOURCES. FOR THE REST, MEMBER STATES COULD MAKE THEIR OWN CALCULAT- IONS. NEGOTIATIONS WITH HONG KONG HAD NOT BEEN EASY BUT IT HAD NOT
HELPED THAT AT THE LAST MINUTE TWO MEMBER STATES INCLUDING THE UK
HAD COME FORWARD WITH ADDITIONAL REQUESTS ON INNER STOPS ON FINISHED
CLOTH. THE DEALS WITH SOUTH KOREA AND TAIWAN AHD BEEN NO LESS
DIFFICULT THAN THAT WITH HONG KONG. WITH BRAZIL AND PAKISTAN IT HAD
MADE NO SENSE TO USE 1976 AS A BASE LEVEL FOR THEIR COTTON EXPORTS SINCE THIS WOULD HAVE GIVEN THE BRAZILIANS, FOR INSTANCE, A LOWER /LEVE
5 CONFIDENTIAL
TIAL
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