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CYPHER/CAT A

ROUTINE HONG KONG

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+248

TO FOREIGN AND COMMONWEALTH OFFICE

ROUTINE HONG KONG TELNO 13 TO U.K.MISSION GENEVA

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/NEUTRAL/

REF.

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RET

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23 MAY 1970

This tel. is dro on HKK 6/309/1

(German file)

ADDRESSED UKMIS GENEVA (FOR JORDAN) TELNO. 13 OF 23RD MAY RFI

FCO, BRUSSELS (FOR DODGE) AND BONN.

BRUSSELS TELEGRAM 11 OF 15TH MAY TO ME, REPEATED TO YOU.

HONG KONG/EEC COTTON TEXTILE ARRANGEMENT.

MAY 1,70

HKK 6/1

PLEASE SEEK OUT ERNST AND TELL HIM WE SHALL CONSIDER A FORMAL

APPROACH FROM THE COMMISSION CONTAINING THEIR REQUESTS AND PROPOS-

ALS IN REGARD TO FUTURE COTTON TEXTILES ARRANGEMENTS, THEY/GP OMITTED/

DEMANDEURS AND IT IS UP TO THEM TO STATE THEIR CASE AND SUPPORT

IT WITH STATISTICS AND OTHER RELEVANT DATA. ERNST SHOULD BE

REMINDED THAT HE WAS TOLD BY JONES AND DORWARD IN MARCH THAT

HONG KONG WOULD AGREE IN PRINCIPLE TO NEGOTIATIONS WITH A VIEW

TO CONCLUDING AN AGREEMENT PROVIDED SOME ASSURANCE WAS GIVEN

THAT THE MAJOR PROBLEMS OF COVERAGE, GROWTH AND BASE COULD BE

RESOLVED IN A MANNER COMPATIBLE WITH THE CTA SEMI COLON ASSUMING

IT IS RENEWED.

2. ERNST IS CLEARLY TRYING TO STAMPEDE US INTO PREMATURE

NEGOTIATIONS BY CREATING A CLIFFHANGER SITUATION OVER OUR GERMAN

AGREEMENT. BUT, IF IT IS NOT EXTENDED AND IF, AS WE BELIEVE,

IT WILL NOT BE POSSIBLE TO CONCLUDE AND IMPLEMENT AN EEC AGREEMENT

IN TIME, WE SHALL BE PLEASED TO REVERT TO FREE TRADE FROM 1ST

CCTOBER. THE REASON WHY WE FEEL AN EEC/HONG KONG AGREEMENT

CANNOT BE CONCLUDED IN TIME INCLUDE:

/(A) WE

CONFIDENTIAL

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