CYPHER/CAT A
CONFIDENTIAL
WASHINGTON TO FOREIGN AND COMMONWEALTH OFFICE
ASHINGTON TELNO 78 TO HONG KONG
CONFIDENTIAL.
/NEUTRAL/
FROM HERMANN.
198 Are. 38
23 OCTOBER 1968
}
HRO
YOUR TELEGRAM 106: TEXTILE CONSULTATIONS.
AT MEETING TODAY, AMERICANS EXPLAINED THAT REASON FOR REQUESTING
CONSULTATIONS WAS NOT TO NEGOTIATE LIMITS BUT SIMPLY TO ASK OUR
HELP IN EMBARRASSING SITUATION THEY ARE IN VIS-A-VIS INDUSTRY OVING
TC SUDDEN RISE IN GLOVE IMPORTS (FROM 688,459 DOZEN IN 1966/7 TC
1,106,563 DOZEN IN 1967/8) AT A TIME WHEN DOMESTIC FRODUCTION HAS
STOOD STILL. WHAT THEY ASK IS THAT AS QUID FRO QUO FOR THEIR HAVING
ACCEPTED. SHIPMENTS WELL BEYOND TRIGGER POINTS IN NUMEROUS CATEGORIES
CE.G. WASHCLOTHS IN CATEGORY 64) WE TRANSFER CATEGORY 39 SHIPMENTS
OVER TRIGGER FOINT TO 1968/9 TRIGGER CALCULATION WITHOUT FORMALLY
FIXING A SPECIFIC LIMIT FOR 1967/3. THEY ASSURE ME THAT IF 1968/9
SHIPMENTS REACH TRIGGER THEY WILL TREAT NEW CONSULTATIONS ACCORDING
TC CONDITIONS PREVAILING AND WILL NOT USE 1967/8 CUTOFF AS A
FRECEDENT.
2. THEY SAID THE QUANTITY WAS SO SMALL THAT IT COULD NOT SERIOUSLY
HARM HONG KONG TO TRANSFER IT. I RETORTED THAT SMALLNESS WAS
EQUALLY GOOD ARGUMENT FOR THEIR ABSORBING IT IN 1967/8: BUT THEY
CONTENDED THAT THEIR POLITICAL DIFFICULTIES ARE GREATER THAN OURS.
3. I REHEARSED ALL ARGUMENTS IN THE BRIEF BUT THEY INSISTED THEIR
REQUEST WAS FOLITICAL RATHER THAN TECHNICAL OR ECONOMIC.
4. 1 POINTED OUT THAT YOUR VIEW OF THE REQUEST WOULD INEVITABLY BE
COLOURED BY THE FACT THAT TAIWAN HAD HEAVILY OVERSHIPPED EITHER
WITH PERMISSION OR AT LEAST WITH IMPUNITY. THEY CLAIMED THAT THEY
HAD REFUSED FERMISSION AND ARE INSISTING ON DEDUCTING WHOLE OF THIS
YEAR'S OVERSHIPMENTS FROM NEXT YEAR.
5. IF IT CAN BE DONE WITHOUT GREAT INCONVENIENCE I AM IN FAVOUR OF
MAKING A MINOR SACRIFICE NOT ONLY IN RETURN FOR BENEFITS RECEIVED
CONFIDENTIAL
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