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Perhaps not unexpectedly, Mr. Midgley's letter does not take us much further. He agrees that we can only wait developments although I suspect he will, as has Mr. Gallagher, revert to the question in the light of the announcement of the Prime Minister's visit (about 8 December).
3. Mr. Midgley has, of course, faced the same dilema as we have in trying to provide something for the Americans. I do not consider - although he has certainly not spelt it out - that there are any "sacrificial lambs" which one could find any logical basis for and at the same time buy the Americans off. If the American position is as set out in Paragraph 2 of Mr. Midgley's letter, the least the Americans would expect to get would be comprehensive bilateral restraints from the principal low cost suppliers. However, Mr. Dunnett has got a copy of Mr. Midgley's letter and is considering what reply to return to it; my own feeling is that for now there is nothing useful we can say.
4. We have today received a copy of UKDEL EC Brussels telegram No.239 about possible talks between members of the Commission and officials in London, mainly aimed at the EEC common commercial policy and Hong Kong but which I will suggest we can usefully employ also to probe the attitude of the EEC to the fact finding exercise in GATT. If they were at that time fairly firm on going ahead, one could refer to this, on the assumption that we would equally be supporting such a proposal then, in any briefing for the Prime Minister's visit to Washington. We have not been able to inject this thinking into the Board of Trade yet as Mr. Goldsmith, who is the main one concerned with UKDEL 239, is away until the beginning of next week.
5 Today's Financial Times reports a statement (which we have not heard previously) by the Japanese Minister on International Trade and Industry, Mr. Ohira, that somehow he intended to "finalise" Japan's position on textile quotas before the Prime Minister departs. We have not yet had the record of the intended meeting this week between the President of the Board of Trade and Mr. Ohira but, before telegraphing to Tokyo, I have asked the Board of Trade to find out what took place at the meeting and whether there was anything to bear out the statement in the Financial Times. If there is not, and Mr. Ohira is still in London, I shall suggest that the Board speak to him about the alleged statement. If he has gone on, but not back to Tokyo, we shall need to telegraph first thing tomorrow.
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