CYPHER/CAT A

PRIORITY HONG KONG

CONFIDENTIAL

TO FOREIGN AND COMMONWEALTH OFFICE

TELEGRAM NUMBER 443

7 JULY 1978.

CONFIDENTIAL

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ADDRESSED FCO TELNO. 448 OF 7TH JULY RFI UKDEL EEC, BRUSSELS (FOR DODGE), BONN, UKMIS GENEVA (FOR JONES), THE HAGUE, PARIS, ROME.

COTTON TEXTILES : HONG KONG / E.

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UKDEL EEC TELEGRAM 295 TO YOU.

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(60) 1(69

61

RE: LIVED IN

REGISTRY No. 51 - 8 JUL 1970

HILK6/6

I AM GRATEFUL FOR THE ADVISE OFFERED AND AGREE THAT THE COMMISSION ARE BEING UNHELPFUL FOR TACTICAL REASONS. I HAD NOT, HOWEVER, INTENDED TO REQUEST AN INTERVENTION IN THE NEGOTIATIONS BUT RATHER AN EXPRESSION OF BRITISH SUPPORT FOR OUR POSITION. AS

I UNDERSTOOD IT, DELEGATION OF AUTHORITY TO ME FOR TRADE RELATIONS IN RESPECT OF INDIVIDUAL COMMODITIES OR SUBJECTS DOES NOT CARRY WITH IT ANY IMPLICATION OF A WITHDRAWAL OF YOUR SUPPORT, THROUGH DIPLOMATIC CHANNELS OR OTHERWISE SEMI COLON EXCEPT, OF COURSE, WHERE OUR ACTION OR VIEWS MIGHT BE IN CONFLICT WITH U.K. POLICIES OR INTERESTS WHERE WE MUST ACCEPT THAT THERE ARE SUBSTANTIAL

LIMITS TO THE SUPPORT YOU CAN GIVE.

2. IN THIS PARTICULAR CASE OF OUR COTTON TEXTILE TRADE THERE IS, SO FAR AS I AM AWARE, NO SUCH CONFLICT. INDEED WE WOULD PRESUME THAT YOU TOO HAVE AN INTEREST IN SEEKING THAT THE PRINCIPLES

OF THE C.T.A. (AND OF THE G.A.T.T.) ARE NOT BREACHED UNILATERALLY.

3. TO AVOID CONFUSION, HOWEVER, I NOW PROPOSE THAT DODGE SHOULD REPLY TO ERNST'S LETTER OF 16TH JUNE TO HIM, STATING THAT HONG KONG IS AGREEABLE IN PRINCIPLE TO EARLY NEGOTIATIONS. AS A PRECONDITION OF SUCH NEGOTIATIONS, HOWEVER, A FACTUAL STATEMENT OF THE REASONS AND JUSTIFICATION FOR THE E.E.C. REQUEST FOR RESTRAINT IS REQUIRED,

/ THIS STATEMENT

CONFIDENTIAL

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