TIAL
CONFIDENTIAL
-2-
(A) DIVERSION OF EXPORTS TO BRITAIN SEMICOLON
B) PRESSURE FROM BRITISH INDUSTRY FOR HONG KONG TO IMPOSE
SIMILAR RESTRAINTS.
I DO NOT BELIEVE THAT THE EXTENSION IN TIME OF THE EXISTING POLYESTER/COTTON RESTRAINTS AND THEIR EXTENSION IN SCOPE TO COVER POLYESTER/POLYNOSIC SHIRTS WOULD CAUSE (A). IF HOWEVER IT DID AND THIS LED TO (B) AND YOU REQUESTED RESTRAINT ON HONG
KONG EXPORTS TO BRITAIN, THEN AS I SAID IN PARA. 3 OF MYTEL 639
WE ARE PREPARED TO ACCEPT THE CONSEQUENCE THAT WE MIGHT FACE
SUCH A REQUEST.
5
IN THESE DISCUSSIONS (? GP OMITTED) INDUSTRIES I ALSO PUT FORWARD
I
THE SUGGESTION THAT THE SWEDES BE DELIBERATELY FORCED INTO TAKING
ACTION UNDER ARTICLE XIX OF THE GATT. THE ARGUMENTS FOR AND AGAINST
THIS WERE GONE OVER AT LENGTH AND THIS COURSE WAS EVENTUALLY
REJECTED. I KNOW OF NO NEW ARRGUMENTS FOR REVIVING IT IN THE
CANADIAN CASE. AS YOU KNOW, I SEE GRAVE DANGERS FOR HONG KONG IN THIS COURSE, WHICH HAS IN FACT BEEN REJECTED IN EVERY NON-COTTON CASE WE HAVE HAD, STARTING WITH THE GERMAN WOOLLEN KNITWEAR NEGOTIATIONS. IT WOULD BE UNLIKELY TO BE NON-DISCRIMINATORY IN PRACTICE, HOWEVER IT WAS PRESENTED. IF DISCRIMINATORY ACTION WAS NOT
UNDERLINE NEXT WORD SUCCESSFULLY CHALLENGED, IT COULD PROLIFERATE. IT COULD INVOLVE SEVERE CUTBACKS AND WOULD ALMOST CERTAINLY
INVOLVE IMPORT CONTROL.
6.
THE DISCUSSIONS ALSO TURNED. TO THE MATTER OF BRITISH POLICY
VIS-A-VIS THE ''STANS INITIATIVE". HERE AGAIN I HAVE
MADE MY VIEWS CLEAR OVER RECENT MONTHS, I BELIEVE THAT THE FACT
THAT WE CAN SHOW THAT WE HAVE BEEN ABLE TO DEAL WITH THESE MATTERS SATISFACTORILY WITHOUT RECOURSE TO A NEW INTERNATIONAL
AGREEMENT STRENGTHENS OUR HANDS AGAINST STANS, ON THE OTHER
HAND, IF WE WERE TO REFUSE TO NEGOTIATE AND TO REFUSE TO CONCEDE
WHERE THE IMPORTING COUNTRIES ARE CONVINCED AND WE CAN ACCEPT
CONFIDENT IAL
ONFI
/THAT