Our anxiety remains that the US should be restrained from
extending restrictions into the MMF and woollen fields and we
would prefer that any further moves over this problem should be made within the GATT. We recognise that the determination of
the Americans means that there may well have to be some sort of
compromise with the inflexible opposition so far presented to
their proposals even though their economic case is a bad one.
We intend to keep in touch with the Japanese and of course with
Hong Kong. Our present thinking is also broadly in line with
that of the EEC who indicated at the CTC that they favoured a
GATT study of the problem and will no doubt develop this proposal
at the resumed session in December. We do not expect the American
to act unilaterally or allow Congress its head before then.
Hong Kong Department 31 October, 1969