CONFIDENTIAL

CYPHER/CAT A

HONG KONG TO FOREIGN AND COMMONWEALTH OFFICE

HONG KONG TELEGRAM NO.117 TO WASHINGTON

CONFIDENTIAL

[NEUTRAL]

TOP COPY

4 DECEMBER 1968

на

ADDRESSED WASHINGTON AS MYTEL 117°F 4TH DECEMBER (FCO PLEASE PASS)

FOR HERMANN, OUR TELEGRAM 114T GLOVES,

THE PRESENT POSITION IN REGARD TO CATEGORY 39 IS AS FOLLOWS:

(A) CONSULTATION LEVEL:

(B) SHIPMENTS TO DATE:

343.00 Doz.

139.852 DOZ.

(C) UNSHIPPED BALANCE OF EXPORT AUTHORISATIONS ISSUED: 293,148 DOZ

(D) (B) PLUS (C); 343.000 DOZ.

(E) OUTSTANDING EXPORT AUTHORISATION APPLICATIONS:

166,774 DOZ.

2. IT IS REGRETTED THAT INADVERTENTLY EXPORT AUTHORISATIONS

WERE ISSUED UP TO THE CONSULTATION LEVEL AND THE AMERICAN CONSULATE

GENERAL WAS INFORMED WITHOUT IMPLICATIONS FOR UNFINISHED CONSULT-

ATIONS BEING NOTED, CONSULATE HAS NOW BEEN ADVISED THAT THIS

WAS NOT INTENDED TO PRE-EMPT THE UNRESOLVED ISSUE OF QUOTE

OVERSHIPMENTS UNQUOTE IN 1957/68 SEMI COLON AND THAT FULL

EXPLANATION WOULD BE GIVEN TO YOU.

3. THERE IS NO DOUBT THAT BY THE LETTER OF THE AGREEMENT

WE WERE WITHIN OUR RIGHTS IN VIEW OF THE DELAYED AMERICAN

ANSWER TO YOUR LETTER OF 7TH NOVEMBER SEMI COLON BUT PLEASE

ASSURE THEM FIRMLY THAT WE ADOPT NO SUCH ATTITUDE. WE ARE

NEVERTHELESS CONCERNED AT THE IMPLICATIONS OF THE PRESENT

SITUATION FOR OUR TRADE NEXT SUMMER. IT SEENS CLEAR THAT THE

LONG DELAYED U.S. ACTION AGAINST TAIWAN HAS DIVERTED DEMAND

TO HONG KONG, WITH THE RESULT THAT OUR TRADE WILL HAVE A BOON

PERIOD FOLLOWED MOST LIKELY BY COMPLETE DISLOCATION FOR SEVERAL

MONTHS.

LAST

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heyt

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/ 4. IN VIEW

CONFIDENTIAL

RECEIVED IN ARCHIVES No.31 -5DEC 1968

HKR6/304/1

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