W(B)L 51-7433
NOTHING TO BE WRITTEN IN THIS MARGIN
Registry
No. HKK 6/548/1
DRAFT
LETTER
SECURITY CLASSIFICATION
To:-
Top Secret. Secret.
Confidential.
Restricted. Unclassified.
PRIVACY MARKING
In Confidence
Flag
38
P. W. Carey, Esq., Industries Division 1,
Board of Trade,
1, Victoria Street,
London, S.W. 1.
Type 1 +
From
Mr. J. 0. Moreton
Telephone No. & Ext.
Department
an
3/21
I am afraid that I must resurrect a matter
you probably think is settled. I refer to Saving Despatch No. 712 of 20" December 1968 to Hong about the iscussions held in September in Hong Keng concerning Hong Kong's exports to the U.K.
of wide sheeting and sheets.
2.
We still have to sign with Hong Kong the Memorandum of Understanding promised in the
second paragraph of our Saving Despatch. But
before this can be done we have to resolve one
point on which agreement is lacking. This is revealed between paragraphs 21 of the Governor's
Despatch and 7 of our own. The difference of
opinion is over what was agreed on the question of "growth". The Board of Trade are "offering" 3% growth; Hong Kong believe they have the right to "claim" 6%. Whether offer, or claim, is the right word to use depends on the extent to which the 1966 Heads of Agreement are
considered to be relevant to these 1968
discussions.
The
3. The September talks were held before I had any responsibility for Hong Kong affairs, but I understand that Hong Kong have maintained throughout (with F.C.0's. full support) that they could only be conducted within the frame- work of the 1966 Heads of Agreement governing Hong Kong's exports of cotton textiles to the U.K., any agreement reached on the wide sheeting issue being expressed in modifications to the Heads of Agreement. In this connection please see Heath Mason's letter to you of 27 August, 1968. Hong Kong do not accept that a distinct and separate agreement could be or was concluded in respect of wide sheeting and sheets. We
share that view.
/4.