CYPHER/CAT A

CONFIDENTIAL

PRIORITY HONG KONG TO FOREIGN AND COMMONWEALTH OFFICE

HONG KONG TELNO 121 TO WASHINGTON

CONFIDENTIAL

[NEUTRAL]

TOP COPY

14 DECEMBER, 1968

ник

ADDRESSED AMBASSADOR WASHINGTON AS MY TELEGRAM NO. 121 OF 14 TH DEC.

FOR HERMANN.

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YOUR TELEGRAM NO. 96: TEXTILE CONSULTATIONS.

CONSULATE GENERAL CALLED TODAY TO REQUEST CONSULTATIONS ON WORK

SHIRTS, GLOVES AND CULOTTES. THEY SAY THEY ARE PREPARED TO TALK

EARLY IN WASHINGTON.

BUT INFORMAL 2. WE HAVE NOT HAD ENOUGH TIME TO CONSULT THE C.A.B. ENQUIRIES RAISE DOUBTS ABOUT ACCURACY OF CLASSIFICATION OF WORK SHIRTS AND CULOTTES. USUAL CLASSIFICATION PROBLEMS ARE BEING INTENSIFIED AT PRESENT BY EXTREMELY STRONG MARKET DEMAND FROM U.S. AND THE STEPPING UP OF OUR CHECKS ON DRESSES AND POPOVERS FOLLOWING WASHINGTON DISCUSSIONS IN AUGUST. IT WOULD OBVIOUSLY BE EMBARRASSING - TO GO INTO TRIGGER POINT CONSULTATIONS ONLY TO FIND OUT AFTER

COMPLETION OF FACTORY CHECKS NOW BEING CONDUCTED THAT PROBLEM WAS

ONE OF MISCLASSIFICATION NOT CONCENTRATION.

3. IN THE CIRCUMSTANCES, COULD YOU STALL ON WORK SHIRTS AND CULOTTES, USING EXCUSE THAT WE NEED TIME TO CONSIDER OUR POSITION? PROBABLY CONSULTATIONS WILL HAVE TO BE HELD OVER UNTIL AFTER YOUR VISIT HERE,

BUT WE WILL RETURN TO THIS POINT LATER.

4. SAME CONSIDERATIONS DO NOT APPLY TO GLOVES, WHERE NO CLASSIF- ICATION PROBLEM EXISTS BUT SITUATION DERIVES BASICALLY FROM U.S./ TAIWAN PROBLEM. CONSULATE GENERAL ADVISED TODAY THEY AGREED TO

ISSUE AGAINST PENDING APPLICATIONS OF AUTHORISATIONS FOR ROUGHLY 6,ÞØP DOZEN PAIRS DRESS GLOVES. THIS TAKES SOME OF THE URGENCY OUT OF CONSULTATIONS AND IF YOU SEE POSSIBLE TACTICAL ADVANTAGE IN A PACKAGE DEAL, OR IF IT MIGHT BE IN OUR INTERESTS TO SEE THE SHAPE OF THE 1969 TAIWAN ARRANGEMENTS BEFORE SETTLING, YOU COULD STALL

ON THIS ONE TOO.

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