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13.
I then went on to comment on the arithmetic, confining myself to observing that in only one item (finished wide-width sheeting) had Hong Kong's exports rison rapidly and that in the other items not only had the quota ceiling not been reached in 1967 but also exports to Britain so far this year showed a downward trend.
I said
I thought Hong Kong would find the present proposals very hard to understand at a time when U.K. production (according to Stewart's own figures) was rising by some 6. I assumed Stewart would come to Hong Kong armed with the most detailed figures ho could obtain on the relationship between the various import items and British production.
14.
Stewart replied that his case was much better prepared arithmetically than any part of those put forward by the Scandinavians, and that Hong Kong could rest assured that full information would be available at the time of the discussions. However, if any additional statistics were required in advance he would endeavour to supply them (in an aside to Miss Drew he referred to preparing statistics of knitted sheets, consumption of which appears to be likely to reach 15% of the total sheet market this year). He had distributed the total yardage cut back as equitably as he could among the related items, but if Hong Kong wanted some re-arrangement of the cut back this might be negotiable. Shecting was perhaps not quite as sensitive an item as bed sheets since in the case of the former some work on making up was carried out in Britain.
15.
I then went on to clarify paras 7 and 8 of the Aide Momoire. Stewart confirmed that para 7 was intended to make plain that no growth was to be permitted in the items under discussion. He said that para 8 was intended to convey that H.M.G. would be propared to concede some compensatory increase in either the basket or garment categories.
16.
I then made a final point on timing. The Hong Kong Government had timing problems with negotiations in early September and there was also the possibility of a resumption of the talks with the Norwegians at that time. I thought it possible that Hong Kong would need to know the date of the latter before making a decision on talks on sheeting. It would be most convenient if the Norwegian talks (if held in Hong Kong) and the talks on sheeting could be run together so as to take advantage of Stewart's visit to the Far East.
17.
This comment produced a strong reaction from Stewart. He had (he said) no time to spare other than the dates given in the Commonwealth Office telegram. He could with difficulty nake an earlier date but did not think that this gave Hong Kong time to prepare. He could not postpone the talks as he had a meeting with the Textile Council to consider the productivity study on the morning of September 11th and the Indians also could not manage later dates. He was not seriously concerned with the Norwegian negotiations since the point of principle in which
* warp.
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