TNAG-1056-FCO40-1306-Trade-relations-between-Hong-Kong-and-the-EEC-1981 — Page 27

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RESTRICTED

itica

my Clift have mit get Taza

What is ű beren on this behalf.

Office of the United Kingdom Permanent Representative

to the European Communities

Rond-Point Robert Schuman 6 1040 Brussels

Telephone 736 99 20

Miss A J Brimelow CRE1

Department of Trade

1 Victoria Street LONDON SW1

THICK 121/12

RECEIVED IN RAGBERY NO. 51 - 4 DEC 1981

Juichicon

23 u

Qur reference

Our reference

xion Date

8112

19 November 1981

DESK OFFICER

INDEX

NO

ار امسالم

Dear Alison

QUANTITATIVE RESTRICTIONS: FRENCH ACTION AGAINST QUARTZ

WATCHES FROM HONG KONG

See (14

1. I expect that you are aware of the French restrictions on imports of quartz watches from Hong Kong (Nimex numbers 91.01.15, 91.01.21 and 91.01.25), which were announced in the press on 23 October but which took effect on 1 October.

15

2. In terms of practical effect, the measures constitute a new restriction on imports from Hong Kong, and were introduced without prior consultation. The position under Community law, however, is more nuancé as far as I can make out from conversations I have had with the Commission and the Hong Kong delegation here. The French have a long-standing residual quantitative restriction on imports of watches from certain sources, but until 1 October had, in legal terms, suspended that restriction as far as Hong Kong was concerned; and their action in October apparently constitutes a removal of that autonomous suspension. It is still not evident to me why that action should not have been notified to the Commission and other Member States in accordance with Article 17 of Regulation 926/79, but Beseler's Division in the Commission do not appear to be excited about any French breach of EC law at this stage, at any rate. Perhaps the removal of an autonomous suspension does not constitute a "unilateral change to ... import arrangements" in the terms of Article 17(2).

3.

Whatever may be the niceties under internal Community legislation, the Hong Kong authorities (understandably) regard this action as a new restriction, imposed without prior consultation and, in their view, inconsistently with GATT Article XIX. They have yet to take a final decision, but are contemplating lodging a formal complaint in GATT. If they do, their representatives here have told me that they will not limit their attack to the French action on watches, but will extend it to the general issue of the French residual quantitative restrictions on imports from Hong Kong.

RECTRICT

14.