TNAG-1042-FCO40-1292-Possible-Royal-Commission-on-Hong-Kong-and-its-future-House--1981 — Page 75

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

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Following many years of restrictions on cotton textiles, the so-called Multi-Fibre Arrangement (i.e. taking in also

man-made fibres and wool textiles) was established under GATT

auspices for the period 1974-1977. At the eleventh hour in 1977 it was agreed to extend this for another 4 year period, 1978-81, but with a "reasonable departures" provision, under which the developed countries have intensified their restrictive

regimes.

2.

At a GATT meeting in December, 1980, it was agreed that negotiations on further extending the Multi-Fibre Arrange- ment should take place during 1981. Both sides (developed and developing) are still engaged in drawing up their positions. It is unlikely that serious negotiations will be joined until mid summer 1981. Given the usual difficulties Brussels has in formulating a common position for the EEC, it may well be autumn 1981 before the EEC negotiators receive their

instructions.

3.

The developing countries have held one co-ordinating meeting to date, in Bogota, November, 1980. A formal joint position has not yet been adopted, but it is a certainty that the developing countries will resist any renewal of the "reasonable departures" provision and probably seek a return to the terms of the original Multi-Fibre Arrangement. The textile lobbies in developed countries have expressed concern that imports from developing countries have grown faster than markets and are pressing for a "recession clause" that would limit the rate of growth of imports (but only from developing countries) to the rate of market growth. There has also been a suggestion of a more restrictive regime for "dominant suppliers" (Hong Kong and South Korea) to allow relatively generous treatment - for other developing countries. Governments in developed

countries, including HMG, have not yet committed themselves.

4.

Such bilateral agreements as EEC/Hong Kong that actually determine the size of quotas, etc. will not be affected immediately, as they run until the end of 1982.

13 January, 1981

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