TNAG-0940-FCO40-1159-Visits-by-Foreign-and-Commonwealth-Ministers-and-officials-t-1980 — Page 38

MR CLIFT'S VISIT TO HONG KONG:

CONFIDENTIAL

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NOVEMBER 1980

(77

MEETING WITH MR BILL DORWARD, DIRECTOR OF TRADE, INDUSTRY AND CUSTOMS

Background

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1. The original Multi-Fibre Arrangement, signed in 1974, was designed

to provide a framework for textile agreements between importers and

exporters. The intention was to allow the exporters (mainly develop-

ing countries) steadily growing access to markets whilst protecting

the developed markets against disruption by a flood of low-cost

textile imports. The MFA set out conditions for any resultant

bilateral textile agreements. It also established the Textiles

Surveillance Body to monitor such agreements.

2. The MFA was due for renewal in 1977. Hong Kong, though disappoin-

ted by the factionalism of the TSB, wanted no substantial changes.

The importers, led by the EC, were seeking to include stronger

measures against market disruption, and also the principle of global

ceilings (collective quotas for imports from all countries).

French and the EC Commission also wished to favour the poorest

exporters at the expense of the richer ones (Hong Kong, Taiwan and

South Korea).

3.

The

The final result was that Hong Kong signed a strict Bilateral

Agreement with the EC, and the MFA was renewed with only one addition.

This was a clause allowing 'jointly agreed reasonable departures' from

the MFA if circumstances demanded it. These departures were to be as

temporary as possible.

The 1981 Negotiations

4.

The MFA is due for renewal in December 1981, although most EC

Bilaterals last until 1982. The importers will want to curtail quotas

even more. HMG is under strong pressure from the textile industry to

CONFIDENTIAL

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