CONFIDENTIAL
10. It is a fact that apart from our attempts to mitigate the effects on Hong Kong, the UK was instrumental in obtaining a very hard mandate overall. Our main arguments for doing so were the massive job losses in the UK industry which became particularly serious from 1980 onwards, and the inability of the UK industry to restructure at a socially acceptable pace unless it were given substantial protection against growth in low-cost imports (see Annex B).
11. In February 1982 the Council agreed that the Community should withdraw from the MFA at the end of this year unless a, positive decision to the contrary were taken in the light of the new bilateral agreements. With the successful conclusion of negotiations with Hong Kong and only three other suppliers outstanding, it now looks certain that the Council will decide on 13 December not to withdraw.
NEGOTIATIONS WITH SUPPLIER COUNTRIES
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These too have proved difficult with the "dominants" holding out to the end. Four rounds of negotiations were required to achieve agreement with Hong Kong. After the second round the situation was considered by the EC Foreign Affairs Council on 25/26 October. At that Council the Community agreed unanimously to maintain the existing mandate including the requirement for 10% cut-backs.
(COI Retract 76 of 27 October
An unfortunate press release Annex C) gave the impression
that Britain had been in the lead in refusing the Commission's request for a measure of flexibility. This was widely reported in Hong Kong. In fact other Member States, in particular France, made it clear that they were not prepared to accept the Commission's proposal either. The latter consisted of a reduction in cut-backs in respect of children's clothing, for which there was no economic justification.
CONFIDENTIAL
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