TNAG-0762-FCO40-966-Effect-of-GATT-Multi-Fibre-Arrangement-(MFA)-on-Hong-Kong-ex-1978 — Page 190

-9.

On flexibility, that is swing, carryover and carryforward,

the Community originally made no proposals at all. In the new

Agreement the normal swing percentage has been reduced from 7% to 5%

and for highly sensitive items it is generally lown from 5% to 3.5%,

but these figures are obviously better than none. In the US Agree-

ment the swing percentages range from 3% to 15% depending on whether

a category or group is involved. There are no group limits in the

HK/EEC Agreement, so it is a bit difficult to make a comparison.

A marked difference however is that in the EEC Agreement there is

the

virtually 100% swing between the three types of fibres - cotton, wool

and man-made fibre, whilst in the US Agreement there is a maximum

of 10%. On carryover and carryforward we have 5% for each in the

new EEC Agreement, but slightly higher percentages in the US Agreement.

The coverage of the EEC Agreement is comprehensive but

unlike the US Agreement there is no predetermined ceiling on the

amount that we can export. without going into the detail, I can

assure you that had we not been able to move the Community from their

original proposals for introducing new restraints, there would have

been no prospect of us reaching any agreement. In the US Agreement

additional restraints can be sought at any time when in the view of

the US Government a limitation is required in order to eliminate a

real risk of market disruption. In the new EEC Agreement this cannot

happen at least until we have secured a predetermined share of the

import market, whether a restraint is to be introduced for a single

Member State or for the Community as a whole. The Community has also

undertaken not to fix any such limits below the level of imports in

1976.

/This