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background and an assessment of the negotiating position, together with a suggested opening position to be taken in negotiations and a final fall-back position. It is then suggested that the Hong Kong team should be given discretion to obtain the best deal possible within these two limits, while taking into account the shape of the package as a whole. This would naturally be done in full consultation with industrial advisers, should the Board agree with the Department's re- commendation that such advisers should accompany the official team (see para. 63 below).
3.
In this connection it should also be noted that, since any arrangements reached would be ad referendum the Hong Kong Government and since, before signing any agreement, the Hong Kong Government would first seek the advice of the Board, Members would still have an opportunity to comment on any part of the initialled agreement reached with the Canadians before it was finalised.
The Agenda
4.
The Agenda for the forthcoming negotiations is likely to cover the following:
(a) C.T.A. Article 3 Agreement on certain items of
Cotton Apparel;
(b) C.T.A. Article 3 Cotton Towels Agreement, including
the level of exports for jacquard terry towels, cabinet towels and industrial wiper towels for the remainder of the current textile year and the possibility of limits for the coming year;
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(c) C.T.A. Article 4 Cotton Fabrics Agreement; (d) a Canadian request for restraint on polyester/
polynosic blend shirts;
(e) Hong Kong's Unilateral Undertaking on exports of polyester and polyester/cotton blend shirts,
blouses and trousers.
General Considerations
5.
There are no indications to suggest that the Canadian Government is at this time considering the removal of any of the restraints presently applied to textile exports from Hong Kong, with the possible exception of those on cotton fabrics. On the contrary, the Canadians have been taking a very rigid attitude this year over consultation levels for certain towels (see paragraphs 22 to 25 below) and the Department has recently received a formal request to broaden the coverage of the restraint on non-cotton shirts (see paragraphs 44 to 50 below).
6.
Other factors to be taken into account this year are, first that the Cotton Textiles Arrangement formally expires on 30th September, 1970 and that consideration will need to be given this year to whether it should be renewed and, if so, in what form; and secondly that the argument over the future of the C.T.A. is likely to be closely bound up with American
These pressures to extend restraints to non-cotton textiles. broader considerations will need to be borne in mind in the discussions with the Canadians. In the first place it will
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