TNAG-1492-FCO40-2050-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 328

CONFIDENTIAL

(B) NEW ROUND: MANY REFERENCES EG. MFA NEGOTIATIONS WOULD HAVE A

KEY ROLE IN BUILDING CONFIDENCE FOR A NEW ROUND AND IT WAS

INCONSISTENT FOR SOME COUNTRIES (IE THE US) TO BE LIBERAL IN THE

PREPCOM AND PROTECTIONIST IN THE MFA NEGOTIATIONS (HONG KONG AND

MANY OTHERS). INDIA INSISTED THAT PROGRESS IN THE PREPCOM WOULD

DEPEND ON WHAT HAPPENED IN THE MFA AND THAT THE TWO NEGOTIATIONS

SHOULD PROCEED IN PARALLEL. EGYPT SAID THAT TEXTILES SHOULD NOT BE

INCLUDED IN THE NEW ROUND: THE MFA WAS A DEROGATION FROM GATT RULES

WHICH SHOULD BE CORRECTED WHATEVER HAPPENED IN THE NEW ROUND.

(C)

NON-DISCRIMINATION WAS MENTIONED BY A NUMBER OF SPEAKERS. CHINA

SAID THAT WHILE MFA EXPORTS TO THE UNITED STATES HAD RISEN 3% IN

1985, THOSE FROM THE COMMUNITY HAD INCREASED BY 27%.

(D) MANY (CHIEFLY THOSE DIRECTLY AFFECTED) CALLED FOR A CONTINUATION

AND PROPER APPLICATION OF PROVISIONS FOR FAVOURABLE TREATMENT FOR

SMALLS, NEWS AND COTTON PRODUCERS.

(E) MANY VEILED AND NOT SO VEILED ATTACKS ON THE US. INDONESIA SAID

THAT MANY ELEMENTS OF THE JENKINS BILL WERE REAPPEARING IN CURRENT US DEMANDS. HONG KONG SAID THAT BILATERAL AGREEMENTS MUST RÉFLECT

WHAT WAS AGREED MULTILATERALLY. OTHERS REFERRED TO THE

NON-OBSERVANCE OF CERTAIN AGREED PROVISIONS OF MFA 11,

AND REJECTED

EXTENSION OF THE FIBRE COVERAGE. (THERE WERE SOME CALLS TO REDUCE

COVERAGE EG. BY DROPPING COTTON YARN AND COTTON CLOTH PAKISTAN).

(F) COMMUNITY STATEMENT RECEIVED A CAUTIOUS WELCOME AS A FIRST STEP

IN THE RIGHT DIRECTION FROM MANY SPEAKERS INCLUDING BRAZIL, PERU,

SRI LANKA, INDONESIA, URUGUAY AND INDIA VERY CAUTIOUS IN THE LAST

CASE. THE FACT THAT THE COMMUNITY WAS TAKING NEGOTIATIONS FORWARD BY

GETTING DOWN TO SPECIFICS WAS APPRECIATED. MANY WELCOMED THE

COMMUNITY'S COMMITMENT TO AN ULTIMATE RETURN TO GATT RULES AND TO

FAVOURABLE TREATMENT FOR SMALLS ETC. ALL WHO SPOKE SAID (INEVITABLY)

THAT THE LIBERALISATION PROPOSED BY THE COMMUNITY DID NOT GO FAR

ENOUGH. INDIA AND KOREA ATTACKED THE NOTION OF RECIPROCITY

SUPPOSEDLY CONTAINED IN THE CALL BY THE COMMUNITY FOR ALL TO

CONTRIBUTE TO LIBERALISATION.

8. OTHER SPECIFIC POINTS: KOREA SAID THEY HAD LIBERALISED TRADE FOR

64% OF TEXTILE PRODUCTS, AND THIS WOULD REACH 98% BY 1988. THEY WERE A SUBSTANTIAL IMPORTER AS WELL AS EXPORTER. YUGOSLAVIA CALLED

3-

CON" DENTIAL

(FOR

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