0003230
G.F. 323
CONFIDENTIAL
Opening and First Working Sessions:
10.00 a.m.
Thursday, 5th September, 1968
Present:
The Hon. T.D. Sorby
Mr. D.H. Jordan
Mr. D.G. Jeaffreson
Mr. D.S.W. Wong
Mr. S. Stewart Mr. V.S. Carter Mr. M.F.V. Hannam
Mr. Sorby, welcoming the British delegation, said that, as was customary, the Hong Kong team for the consultations would be led by his Deputy, Mr. Jordan. During the course of the consultations, he would probably have to seek the views of his Cotton Advisory Board (C.A.B.), in which case a recess would be necessary. He felt the British delegation would find it useful to meet members of the C.A.B., and the dinner party scheduled for that evening would provide a suitable opportunity for an informal exchange of opinions.
2.
Mr. Sorby continued that consultations on requests for restraint were never welcome as, understandably, both the Hong Kong Government and the business community were opposed to any limitation on Hong Kong's export opportunities. But they were reasonable and prepared to consider such requests when these could be properly supported. Hong Kong's readiness to recognise the problems of others was well known and, where restraints had to be imposed, there was advantage for both the importing and the exporting country if the agreement reached covered a fairly long period; in this way, some degree of certainty in trading opportunities was secured for both sides. But this advantage would be nullified if importing countries pressed for modifications during the validity of agreements. A request such as the present one which was, in fact, unprecedented - posed considerable problems, both political and economic for Hong Kong. The C.A.B. could be likened to the British Textile Council in its quasi-political position and, as textiles were so important in Hong Kong's export trade, there was a wide public interest in all commercial relations developments on this front.
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3.
Britain was an important market for Hong Kong's exports of both loomstate and finished sheeting. As Britain took one-third of Hong Kong's production of wide finished sheeting and was Hong Kong's second largest market for wide loomstate sheeting, any cutback in trading opportunities would present serious problems. Nonetheless, Mr. Jordan had been instructed to enter the discussions with an open mind. If Hong Kong's negotiators could be convinced that some modification to the agreement was necessary,
he would try to persuade members of the C.A.B. accordingly. He felt obliged, however, to advise the British delegation that the carryover dispute of 1965 still rankled, despite the smooth operation of the subsequent arrangements, and he was most anxious that the results of the present consultations should not generate any further ill-feeling. But, given goodwill on both sides, he was hopeful that an amicable settlement could be reached.
in
Mr. Stewart, thanking Mr. Sorby for his words of welcome, said that H.M.G. were fully aware of the importance of the British market to Hong Kong and had no intention of seeking any reduction in the aggregate limits for imports of cotton textiles from Hong Kong. He recalled the liberal record of H.M.G. on textile imports. The present problem dated back to 1966 when, June, the British industry complained to the B.O.T. of the level of imports of wide shoeting. At that time, the B.O.T. had rejected the industry's submission on the grounds that the industry had produced no real evidence of disruption and that the global quota and special country arrangements so recently concluded could hardly be modified at such an early date.
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CONFIDENTIAL