Mr Laird
Mr Wilford
Hong Kong/U.K. Wide Sheeting and Sheets Agreement, 1968
Problem
The Industries Division
Revised arrangements for the restriction of imports from
Hong Kong of cotton sheets and wide sheeting were negotiated
in September, 1968. It has not been possible to reach agree-
ment with Hong Kong on one aspect of these negotiations,
namely the growth arrangements.
(formerly of the Board of Trade, now of the Ministry of Tech-
nology) maintain that Hong Kong agreed to a limited growth
provision of 3% per annum as part of the revised arrangements.
The Hong Kong Government deny this and maintain that, in the
absence of any substantive discussion or agreement about
growth during the negotiations, the general growth provisions
in the main agreement governing Hong Kong's exports of cotton
textiles to the U.K. (the "Heads of Agreement") are applicable;
these provide for a potential growth rate of 6%.
Recommendation
2. I recommend that we should support the Hong Kong Govern-
ment in this matter, if necessary taking it to ministerial
level. But as a preliminary step I suggest an exploratory
discussion with Mr Goldsmith (Board of Trade) on the basis of
the arguments set out in the attached Note, which would be
designed to elicit Board of Trade support at official level.
13.
10