DRAFT REPLY TO DESPATCH FROM THE GOVERNOR OF
HONG KONG dated SEPTEMBER 27, 1968.
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I am writing to thank you for your despatch
(CR.12/5401/62-V) of September 27 about the
discussions which took place in Hong Kong on
September 5 and 6 on exports of wide sheeting
and sheets to the United Kingdom.
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2. Let me assure you at once that there was no
intention on our part of ignoring the existing Heads
of Agreement. As you will recall, the opening
sentence of the Board of Trade aide-memoire of
August 9 referred in terms to the possibility first
notified in a letter dated 31 October 1967, that
"Her Majesty's Government might wish to ask the
Government of Hong Kong to impose restrictions on
exports of wide sheeting and sheets..."; and the
final sentence of the same aide-memoire, dealing with
offsetting compensation, stated that "Her Majesty's
Government would be prepared to consider some
modification to existing arrangements for the
sensitive categories".)
3. The plain fact is, as we see it, that the
categorisation provisions of the Agreement are not
unduly onerous; it is not altogether surprising
that the scope which it allows for concentration on
exports of particular types of textiles, (given the
generous share of the market reserved for Hong Kong
within the limitations applicable to "restrained"
countries as a whole) should have resulted in a
request for a modification in respect of one of them.
I do not mean to imply that you can expect a shoal
of similar requests.
/4.