TNAG-0763-FCO40-967-Effect-of-GATT-Multi-Fibre-Arrangement-(MFA)-on-Hong-Kong-ex-1978 — Page 15

3

UK

1,515,000

D

· 1,597,000

BNLX

839,000

IRL

Nil

DK

162,000

F

I

62,000

63,000

The Community was now able to respond to the .K., requests by means of

a mix of transfers and straight additions.

The Hong Kong representative said that the Community offer fell short of what Hong Kong considered equitable. However, in the interests of

settlement,he was ready to accept the offer. He noted that the Nomenclature

Committee would now seek to devise a definition of "blousons".

II. Origin

The Community representative said that the Community took the view that the existing temporary derogation from the Community's origin rules for certain categories of Hong Kong goods could not be allowed to continue indefinitely. At the same time, it was recognised

that the matter was of direct economic concern to Hong Kong and there was no disposition to disrupt the trade abruptly.

With these points in mind, we were seeking an administrative solution to permit a return to the full legality of the origin system.

A permanent derogation risked establishing a precedent. The Community's attitude also had to be seen in the context of recent cases of diversion

of trade, which, if not dealt with, would affect the credibility of the Community's origin system. In this connection, the Commission sought discussions on such cases with Hong Kong and would welcome.

confirmation of readiness to cooperate.

On the derogation, the Hong Kong representative underlined the importance of satisfactory origin arrangements for this long established sector of the trade. The Community had recognised that there was a legitimate interest. His premary concern was also to avoid abrupt interference when the present arrangements expired at the end of the year. The present arrangements were not satisfactory and, as an interim solution and a step towards a return to the full application of the origin rules,he proposed instead resort to the Community transit

Corr. OJ 146/2.6.78) arrangements (Regulation 616/78: OJL 84/31:3.78

./.

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