CYPHER/CAT A
IMMEDIATE HONG KONG
TELEGRAM NUMBER 660
CONFIDENTIAL
NEUTRAL
CONFIDENTIAL
80
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TO: FOREIGN AND COMMONWEALTH OFFICE
20 AUGUST 1969
ADDRESSED FCO TELEGRAM 669 OF 20 AUGUST REI OTTAWA.
ገና
MY TELEGRAM 659.
FOLLOWING IS TEXT OF CANADIAN STATEMENT, BEGINS :-
'AS YOU KNOW WE WERE INFORMED YESTERDAY MORNING FOR THE FIRST TIME
THAT THE BRITISH GOVERNMENT HAS INSTRUCTED THE HONG KONG GOVERNMENT
NOT TO ENTER INTO ANY FINAL AGREEMENT FOR NEW OR EXTENDED REST-
RAINTS OF EXPORTS OF NON-COTTON TEXTILES TO CANADA PENDING DIS-
CUSSIONS IN OTTAWA ENVISAGED FOR LATE SEPTEMBER BETWEEN REPRESENT-
ATIVES OF THE U.K. AND CANADIAN GOVERNMENTS, WITH PARTICIPATION BY A
REPRESENTATIVE OF THE HONG KONG GOVERNMENT. WE UNDERSTAND THAT THE
U.K. GOVERNMENT THOUGHT THAT THESE TALKS MIGHT TAKE PLACE AT THE
TIME OF THE FORTHCOMING VISIT TO OTTAWA OF MR HUGHES OF THE BOARD
OF TRADE TO DISCUSS THE PROPOSED U.K. COTTON TEXTILE TARIFF CHANGES.
THIS UNEXPECTED DEVELOPMENT CAUSED US TO RECONSIDER WHETHER THERE WAS
ANY PURPOSE IN PROCEEDING WITH THE DISCUSSIONS THAT HAD BEEN
ARRANGED FOR THIS WEEK, SINCE AS I SUBSEQUENTLY EXPLAINED THE
PROPOSAL THAT WE HAD DECIDED TO PUT FORWARD WAS A PACKAGE'
PROPOSAL COVERING BOTH COTTON AND NON-COTTON TEXTILES THAT HAD BEEN
WORKED OUT THROUGH A QUITE DELICATE BALANCING OF RELATIVE ADVANTAGES
AND DISADVANTAGES. YOUR INDICATION THAT THERE COULD BE NO FINAL
SETTLEMENT ON THE NON-COTTON ITEMS LED US TO WONDER WHETHER WE COULD
PUT FORWARD THE PROPOSAL WE HAD DEVELOPED. ON THE OTHER HAND WE
WERE GIVEN TO UNDERSTAND THAT WHILE FINAL AGREEMENT ON THE NON-COTTON
PENED IN
R.CH TRY No.51
20 AUG 1969
HKK6/331/1
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