TNAG-0763-FCO40-967-Effect-of-GATT-Multi-Fibre-Arrangement-(MFA)-on-Hong-Kong-ex-1978 — Page 36

From the Secretary of State

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disruption, ie the combined effect of imports from all low-cost sources on domestic industries. Imports from low-cost sources have increased dramatically in recent years and it was therefore decided that all the major low-cost suppliers should be included within the Community's import regime for textiles. To this end over twenty bilateral agree- ments embodying formal quota arrangements were negotiated. In addition various arrangements were reached with the major Mediterranean suppliers, including Greece, with whom, because of the Association Agreements between these countries and the Community, it was recognised that it would not be possible to negotiate formal agreements. Whilst fully appreciating the special relationship between the Mediterranean countries and the EEC it was considered that some arrangement with these suppliers was essential if the Community's textile policy was to be fully effective

I agree that in the context of the UK's overall textile and clothing imports, imports from Greece may appear very small but, as I have indicated above, in terms of cumulative disruption any imports from any low-cost source can have a damaging effect. This is especially true in the case of the two products for which the UK sought more formal restraint when levels had been exceeded, T-shirts and blouses. of these products into the Community as a whole and to individual

Imports Kember. States from all low-cost sources are covered by 'global ceilings'. This means that because of the sensitivity of the product for Community industries, a ceiling has been set which should not be exceeded. There are global ceilings for the eight most sensitive textile and clothing products and the maintenance of these ceilings is a fundamental principle of the Community's textile policy. Furthermore the domestic industries within the Community attach very great importance to these global ceilings; any breach in the ceilings would severely damage the industries' confidence in the effectiveness of the textile regime as a whole.

You mention the question of the relatively small size of the levels agreed for exports to the UK from Greece compared with those for other Kember States or from other low-cost suppliers. This is because in all cases the levels have been based on previous levels of trade. 1976 was used as a base year in determining the levels for both the formal bilateral agreements and the less formal arrangements. If there is a higher quota for Germany than for the UK this is because traditionally Germany has been the more important trading partner. In other cases

the reverse would be true and the UK would take a larger share of a product from a particular supplier. It is not surprising that the quotas for Hong Kong should be higher than the levels for Greece as Hong Kong has always been and, indeed, continues to be the UK's most important supplier of low-cost textiles and clothing. In some cases in fact the

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