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RECEIVED IN
REGISTRY No.51
29 JUL 1969
HKRG / 381 //
R&R
No. Stewart
Reference........
Non-cotton textiles : Canada - Hong Kong
37
252 2577
You may remember that at the meeting with Mr. Jordan on 23rd June we discussed the Canadian request for restrictions to be imposed on imports of polyester/polynosic shirts. Mr. Jordan told us he was going back to Hong Kong via Ottawa and would be seeing Mr. Rodney Gray, although there would be no negotiations ut present: and he reacted with some asperity when I expressed the hope that there would be no negotiations on a hypothetical basis.
GW
2. I do not know whether the F.C.0. has seen a copy of the Hong Kong record of these discussions we have not
but you will see from the attached letter from the High Commission that Mr. Jordan had what might reasonably be described as a first Found of negotiations with the Canadians, and that he apparently undertook on leaving Ottawa to put forward a counter-proposal and/or suggest negotiations should take place in Hong Kong which would both deal with polyester/polynosic and polyester/cotton shirts and other items under restraint. I have heard of no counter-proposals, nor that any date has been fixed for negotiations.
3. We have an essential interest in all this, because of the effect which accelerating bilateralism is likely to have on our own position. We want to be able to rely only on the tariff for the protection of the Lancashire industry, but it would be very difficult if not impossible to hold the position on this if we were forced by the action of others to impose restrictions on imports of man-made fibre garments, when we already have a tariff. The Canadians as usual are quite hypocritical about the matter: they prefer bilateral to multilateral action because it gives them more room for manocuvre, at least against the smaller countries, who are regularly told that unless they agree to the Canadian terms their imports will be shut out by the imposition of prohibitive (albeit illegal) duties. But of course successful action by Canada to restrain imports of non-cotton textiles whets the American a petite for restrictions and convinces Mr. Stans and others that the resistance to his proposals is motivated as much by anti-Americanism as macizas by commercial considerations.
Lt.
I have an uneasy feeling that the Hong Kong authorities do not intend to consult us about what they are do ing if they can possibly help it. Can we be assured by the F.C.0. that, as matters stand, there is no possibility of an agreement being reached with Canada until we have seen all the relevant figures and had sufficient time to consider (i) whether they match up to the requirements of Article XIX and (ii) what the implications are for the U.K. industry. I am quite sure that the Canadians would not risk taking action against Hong Kong at the present time, whatever happened, because of their own negotiating position on textiles. I am also convinced that it is now in the Hong Kong interest to help us resist pressures to put back quotas on cotton textiles after 1st January 1972. In terms of world trade her interest should be in increasing the size of the developing countries textile cake, even if she has a smaller share in it.
MR. KEMMIS (CRE)
c.c. Mr. Carey (1.1) Mr. Toms (CRE2)
Miss Lackey
Mr. Jupp (1.1)
SS.
S. STEWART,~ Ind. 1,
24th July 1969.
Mr. Carter (FCO)
Mr. G. Whitehead (Fco) Mr. Dunnett (CRE1) Miss Welch (1,1) (n.n.)