Mr. Whitehead
D
is concerned
* see PS.
against the
Sured es' request,
(who would be sure to leam of this)
MCC 13/393/2
copy to MCC 13/3
R&R
112
Hong Kong Sweden Textile Negotiations
- Implications for Discussions with Mr. Stans.
Telegram No. 339 from Hong Kong - enclosure 125
with one of the "bilateral" matters with which Hong Kong Department deals. They will be con- certing with the Board of Trade a line on a reply.
2.
Since, however, there are some points in the telegram with a bearing on the forthcoming discussions with Mr. Stans, I have
talk with Mr. Stewart in 】 Hong Kong Department and I am sending him a copy of this minute.
No
3. Perhaps the main point is that, according to paragraph 10 of the telegram, the statistics supplied by the Swedes indicate that the degree of market disruption may exceed the "benchmarks" previously accepted as justifying restraints on the export of certain non-cotton items to Sweden and Norway. doubt the Board of Trade (Industries 1) will analyse the statistics to see whether the Swedish case is in fact as good as it appears. If it is, and if, at a subsequent negotiation in June, the Hong Kongers conceded restraint on some or all of the items, the line we propose that Hong Kong should take with the Americans would not have been weakened. Indeed, the Americans will almost certainly find it impossible to produce comparable statistics, even with the previous "benchmarks'
4. You will note the statement in paragraph 10 that to refuse restraints, on the statistics supplied, would strengthen Mr. Stans саве. I take this to mean that, if Hong Kong (under our direction) stood out the
靠
Americans would argue that this showed that Hong Kong was determined to increase her exports, whatever the market disruption caused in recipient countries. If the Swedes reacted by imposing a quota, the Americans could say, "If even the Scandinavians, with all their sympathy with the developing world, have to impose quotas on textile imports from the Far East, the threat must be grave indeed.
#
5. As to instructions which might be given to Hong Kong, I feel that HMG should not accept the request that, about 20 May, the Embassy in Stockholm should simply inform the Swedes that Hong Kong was prepared to concede restraint. If we did, word would get to the Americans who would be justifiably angered by à transparent device to delude them, during Mr. Stans visit, that there were no new Scandinavian type concessions in the pipeline. Moreover, it would in effect mean that the exploratory "talks" (see last sentence of paragraph 3 of the telegram) were being treated, retrospectively, as negotiations.
We are
1