CONFIDENTIAL
HONG KONG TELEGRAM NO. 463 TO FOREIGN AND COMMONWEALTH OFFICE
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6. IF CANADIANS ALLEGE THAT WE ARE BEING DILATORY OVER THIS PROBLEM
IT CAN BE POINTED OUT THAT WE ARE STILL WAITING TO HEAR THEIR.
REACTIONS ON TOWEL SUB-ITEMS WHERE HONG KONG HAS HIT TRIGGER POINTS,
AS OF NOW E/AS REMAIN SUSPENDED ON THESE ITEMS, ON ONE OF THEM
SINCE 24 JANUARY AND THIS IS CREATING DIFFICULTIES FOR US. OUR
CONCLUSIONS ARE THAT THE BEST THING TO DO IS TO GET ROUND A TABLE
AT THE EARLIEST PRACTICABLE DATE TO SORT OUT ALL OUTSTANDING
ISSUES.
7. WE ARE STILL ASSESSING POSITION BUT IT MAY WELL BE THAT WHEN
NEGOTIATIONS TAKE PLACE, HONG KONG WILL HAVE TO AGREE A LIMIT FOR
POLYESTER/POLYNOSIC SHIRTS AS PART OF A PACKAGE DEAL. IF SO WE WOULD
TRY TO ROLL IN WITH POLYESTER/COTTON. PROVIDED THAT THE CANADIANS
CAN MAKE A GOOD CASE, THIS WOULD NOT UNDERMINE OUR OPPOSITION TO
THE STANS INITIATIVE. WE TOLD STANS WE WERE PREPARED TO MAKE THIS
SORT OF DEAL IN SPECIFIC SITUATIONS WHERE DAMAGE WAS PROVED. IT
WOULD AFTER ALL DO NO MORE THAT INCLUDE ANOTHER FIBRE IN AN EXISTING
NON-COTTON SHIRT RESTRAINT. IN OUR VIEW THE ALTERNATIVE OF THE
CANADIANS IMPOSING THE SURCHARGE, WITH ITS DAMAGING EFFECT ON TRADE
AND THE SUBSEQUENT PUBLIC WRANGLE THAT WOULD FOLLOW, WOULD BE
FAR MORE DANGEROUS FOR HONG KONG, BOTH EXTERNALLY AND
INTERNALLY.
FCO PLEASE PASS PRIORITY TO OTTAWA.
SIR D. TRENCH
▲ REPEATED AS REQUESTED_/
INTERNATIONAL TRADE DISTRIBUTION
COMMODITIES DEPT.
N.A.C.D.
HONG KONG DEPT.
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CONFIDENTIAL