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relatively decently and in accordance with the minimum conditions laid down in the MFA. Developments since January 1982 have indi- cated that the USA intends to keep its word. Negotiations between Hong Kong and the USA are still ongoing but there is no doubt that Hong Kong will be forced to accept a bilateral agreement more restrictive than the current one. The question is how much more restrictive it will be.
22.
The EEC's stated policy was to treat everyone badly and the so-called "dominant suppliers" - Hong Kong, Korea, Taiwan and Macau (Macau is far from being one of the EEC's top four LDC suppliers and its inclusion has been pointed out by some LDCs as a confirmation of the EEC's policy in picking on those that are politically powerless to defend themselves two colonies and a non-country!) even more badly. The contents of the EEC's mandate for bilateral negotiations recently agreed by the Council of Ministers indicates that the EEC, too, has every intention of keeping its word, to Hong Kong's detriment! Hong Kong is scheduled to have a preliminary round of informal discussion with EEC Commission Officials in mid-April.
23.
The LDCs have agreed to continue their coordination and cooperation programme during the bilateral negotiations and beyond. A Trust Fund has been set up under the UNCTAD for this purpose and Hong Kong and certain other LDCs have made financial contributions to it. But since in bilateral negotiations each LDC must look after its own interests first, it is not expected that coordination in respect of bilateral negotiations will have any significant impact on the outcome of those negotiations.
French Quantitative Restrictions
24.
Apart from textiles the only discriminatory action taken by any GATT member against Hong Kong is the import restrictions maintained by France against certain Hong Kong products including transistor radios, toys, umbrellas and certain textile products made of fibres not covered in MFA (mainly silk). These restrictions (and a number of others which have been removed over the years) have been maintained since the late 1950s when France liberalised its imports from all then OEEC countries and their dependent territories except Hong Kong. Hong Kong protested about them. periodically as illegal in terms of the GATT and the French have from time to time either liberalised certain products or increased the quotas. But the hard core items still remained.
25.
The situation changed in October 1981 when the French suddenly announced (without informing HK, HMG, the EEC Commission or the GATT) the imposition of new quantitative restrictions on imports of quartz watches from Hong Kong alone. This was an entirely new discriminatory action taken completely cóntrary to the requirements of the GATT. As a result, Hong Kong decided to initiate action under Article XXIII of the GATT (the nulli. fication or impairment clause) not only in respect of this new restriction but the old ones as well. The procedure involves bila- teral consultations (strictly speaking with the EEC Commission as
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