27366
BOARD OF TRADE
Industries Division 1
1 Victoria Street, London S.W.1
Telex: 25955 Answer Back: BOTHQ LONDON
тов
138 37
Our reference: Your reference:
CONFIDENTIAL
Draw Doglas,
Telegrams: Advantage London S.W.1
Telephone: 01-222 7877, ext. 2026
16th October, 1969.
Thank you for your letter of 8th October, in which you asked for clarification of a passage in the President's statement in the House on 22nd July.
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I confirm that your definition of "total imports" is correct, though I think that in measuring the total we would probably have to exclude yarn: in other words, would probably have to take action of imports of cloth and garments combined rose "significantly above the present level", though at this stage I would not want to be dogmatic on the point. On the other hand, we have not yet attempted to spell out precisely what we mean by a rise in imports "significantly above the present level". In speaking in the House, the President was of course aware that his words would be closely studied by both the Commonwealth and Lancashire, whose interests are diametrically opposed. The formula for the reimposition of quotas (which had been agreed with considerable reluctance by the Textile Council) was therefore deliberately kept a little vague. Everyone could read what they chose into "significantly" and for that matter also decide for themselves the precise period covered by the reference to "the present level". For your own information we had assumed, without giving the matter much thought, that the present level referred to trade in 1968, but as you know imports have fallen substantially this year and for that reason we could very reasonably argue that something less than the 1968 level was intended. We see no reason for tying our hands on this, unless and until other countries adopt a more liberal attitude to imports of cotton textiles.
Although we quite understand Mr. Tang's anxiety to get a more clear-cut statement out of us, we should not I think wish to reveal our hand at this stage. No doubt before long the Hong Kong Government will make a formal request for discussions on our tariff decision. During these talks, there will inevitably be a good deal of haggling over the formula; and if we spell out our intentions in detail beforehand, we should leave ourselves little or no room to manoeuvre. In other words, you should say as little as possible to Mr. P.Y. Tang or anyone else about what is meant by the "present level". The fact that "total imports" includes imports the developed as well as for the developing countries will demonstrate that we are anxious to give the latter a square deal: at present about one-third of our imports is from countries (including Portugal) which are not restricted under the L.T.A.
There is one point on which I would like to comment, however, and that is to ask what is the channel of communication with Mr. Tang. I hope the enquiry has been made through the Hong Kong Government and not direct, and that the Hong Kong Government will refrain from copying to Mr. Tang any correspondence from you on this matter. The right place forany pronouncement seems to us to be the Executive Council and/or the Textile Advisory Board under seal of confidentiality.
As you
/know, I.C.I.
F. D. Milne, Esq., Commodities Department, F.C.O.,
Great George Street, London, S.W.1.
In Stewart, HRD.
I shred be plat If your views
in the
course.
HKK 6/548/8
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