TNAG-0762-FCO40-966-Effect-of-GATT-Multi-Fibre-Arrangement-(MFA)-on-Hong-Kong-ex-1978 — Page 208

and cotton cloth, where the Community ceilings had to be increased by 4.6 % and 7.2% respectively in order to it possible to reach agreement with India, Pakistan, Brazil and Egypt. For the UK the effect is that the ceilings for 1978 will be about 52% and 2% respectively over 1976 import levels. The annual UK growth rates

Over in subsequent years will be 0.3% in both cases. the full period 1976-1982, the average annual rate of increase will be 1.2% for yarn and 0.7% for cloth.

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For other products in Group I, growth rates for the EEC will be as follows: spun synthetic cloth 2.75%; knitted shirts 3%; jerseys 4.1%; trousers 3.1%; blouses 1.5%; woven shirts 1.6%. These are all within the terms of the mandate. Final confirmation of UK growth rates for these products and for products in other Groups is expected shortly.

(iii) Base levels

The new quotas have much more realistic base levels. Under the previous agreements quotas in many cases were set well above existing levels of trade (eg because the MFA required that pre-MFA access levels be maintained). The effect therefore was that quotas in many cases did not prevent big increases in trade. In the new agreements, the EEC has as a rule based new quotas on 1976 levels of trade. This involves a cutback where existing quotas have been under used. In some cases it will also mean an actual cutback on 1977 trade levels. addition, for several Group I products, the three dominant suppliers Hong Kong, South Korea and Taiwan - have had to accept 1978 quotas considerably below 1976 trade. This was necessary to maintain all low-cost imports within the Group I ceilings and yet still allow room for newcomers.

(iv) Effective Trigger Mechanisms

In

Products not subject to initial quotas in the bilaterals are covered by basket arrangements which will allow the EEC to act immediately and introduce new restrictions automatically if this should be necessary. Briefly the agreements specify that if imports of an unrestrained product exceed certain specified proportions of total imports of the product into the EEC in the previous year the Community can ask the supplier concerned to open consultations immediately to agree quota levels.

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