7
1969
welfare we have responsibility.
But whether this is so or not,
to disagree over a difference of 3% in the growth rate, when
the basic export levels agreed were so much lower than they
might have been, is wrong.
8. The Board of Trade have further stated that if Hong Kong
continue to maintain that the "offer" was not accepted at the
time it was made, there would be a strong case for withdrawing
it altogether. Apart from the "take it or leave it" manner
in which (unintentionally, for sure) the offer was made it must
be recorded that Hong Kong formally recorded their disagreement
with these proposed growth provisions on the 27th September.
Not until the 20th December did we take our stand on the offer.
As the end of 1968 approached, the Governor, who had to allocate
the 1969 quota in order to allow trade to proceed normally, was
obliged to telegraph his assumption that the proposals in the
exchange of telegrams and his despatch would eventually be con-
firmed. This is not a background against which it would be
possible, in equity and good faith, to "withdraw" anything,
when Hong Kong has voluntarily restrained her trade with us,
to her own detriment, for a year already in accordance with the
agreement.
9. In fact Hong Kong's exports of wide sheeting and sheets
have failed to reach 95% of their ceiling levels this year. On
the basis of these figures the Heads of Agreement growth factor
in 1970 will therefore be 1% only, against the Board of Trade's
offer of 3%. At the end of 1970 the Hong Kong/UK agreement
thum expires, but as this will be an interim year between the ending
of the agreement and the beginning of the tariff a projection
/on