ESSENTIAL FACTS
CONFIDENTIAL
1. Report on Mr Rees's visit to Hong Kong is at
Annex I. Mr Biffen's statement to the House on the
agreement to extend the MFA (MFA 3) is at Annex II.
2.
Hong Kong and South Korea are both signatories of
the MFA. Both are regarded by the Community as
dominant suppliers (and therefore subject to cutbacks
in the five most sensitive clothing categories viz
T-shirts, pullovers, trousers, blouses and shirts).
China is not a signatory but was present as an observer
at the negotiations on the MFA 3 extension protocol.
The Chinese have a bilateral agreement with the EC
based on MFA provisions but their main interest is in
access to the US market (the Americans, unlike the EC,
regard China as a dominant supplier. They have said
they will not be seeking cutbacks in actual trade. But
we understand that China's US quotas are considerably
under-utilised).
3. The negotiations on MFA 3 ended on 22 December 1981
with the adoption by consensus of a new extension
protocol covering the period 1 January 1982 to 31 July
1986 inclusive. However, as explained by Mr Biffen in
the House, also on 22 December, in going along with the
with
CONFIDENTIAL
/consensus
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