seeking international cover for restraining her imports
in this field, on grounds which seem inadequate to the
Canadians as well as to ourselves. It also coincides
with a review of the whole outlook for trade in textile
which we ourselves are undertaking. We have had some
misgivings that Hong Kong's response to the limited
Canadian request would be construed as compromising our
eventual conclusions and would set off a chain reaction
which would embarrass our efforts to work for satis-
factory international policies in this trade.
For these reasons we asked for a postponement of the discuss-
ions to the middle of September when senior representatives
from London were due in Ottawa to discuss textile questions
with the Canadian authorities. We were also anxious to know,
before Hong Kong committed herself to further restraints for
the year commencing 1st October, whether the Japanese had
yielded to Canadian pressure for continued restraint in
polyester/cotton and the extension of controls to other man-
made fibre shirts.
3. So much for the immediate past. As to the current
situation, under strong persuasion from Hong Kong, we have
agreed that Hong Kong should resume negotiations with
Canada early this week in Hong Kong, where a Canadian
representative will be available. We have told Hong Kong
that while the final decision on whether or not to restrain
exports to Canada will rest ith them we expect them to bear
in mind the importance which we attach to restraints only
being conceded when a situation has arisen in which there is
a threat of imminent action prejudicial to Hong Kong trade, such as the invocation of the G.A.T.T. Article relating to
emergency import restrictions.
4. A background note is attached at Annex A.
Board of Trade
CRE & Induction I September 1969
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