that
allowed under the quotas: Canada has not reached agreement
with Japan, her main supplier; that the interests
of the prairie wheat farmors in the Japanese market
my woll cutweigh tho interests of Quebec in protection: that the tariff on polycatex/cotton cloth is under review
by the Tariff Board, mainly because of the difficulties
c::periencel by the shirt producers; and that for a
mumber of roubong this would be a very awkward moment
for Canade vo impose a ponal duty on importo.
6. But at the ond of the day we must decide what is
in the best interests of Britain and liong Kong. It is
clear from para;7 of your telegram that you have been
misinformed about was was "established" at llughes'
mectingo in London. To have never decided no a
matter of pinciple to agree to voluntary restraint on
non-textile items in any circumstances, still less did
wo give authority to Hong Kong to reach any decisions
on so important a matter. You will recall that in
1967 the Americans made a formal approach to the
Canadians warning them of the possible consequence3
11 llong Kon; entered into a bilateral restraint agrec-
ment. Wo managed to avoid this hurle, The fact that to the extent that it has the position has het deteriorated/io almost certainly
a um latual due to our having agreed to restraint
now
at your
in 1967 and it behoves up to look at the
word
position rush more carefully this time. If Hong Kong were to insist on pushing further along this to the night find herself faced with tariffs and quelas on all her expôts to the U.K.