CONFIDENTIAL
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countries enter our market free of duty. The previous Government had, however,
announced that from the beginning of 1972, we should remove all quantitative
restrictions but apply a tariff roughly equivalent to the CET to imports from
Commonwealth countries. Our present UNCTAD offer entirely excludes cotton
We already apply a tariff against Commonwealth man-made fibre
Commonwealth wool textiles come into the United Kingdom free of duty
textiles.
that noV
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textiles.
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and there are no quantitative restrictions on them.
AAKT (LAS
21.
20.
In the field of non-cotton textiles, the Four Power-meeting in Geneva
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at the end of July did not produce any immediate solution and the threat of
quantitative restrictions being imposed by the United States on Asian suppliers
remains. The Hong Kong Government would prefer to meet this threat by negot-
i..
iating a voluntary restraint agreement with the United States. At this stage,
1.
it is not possible to foresee the outcome of the various lines of action which
Par may be pursued, including the possibility of a GATT study of the whole textile
problem. We shall continue to work for the reduction to a minimumn of new
restrictions on non-cotton textiles but, whatever form they take, it seems
highly probable that some such restrictions will be imposed or negotiated and
will thus limit the growth of Hong Kong exports to the United States. Other
developed countries, including the EEC will then have to consider whether in
such circumstances they will have to introduce restrictions. This problem,
however, does not directly arise from our entry negotiations. At present we
and the Six are taking a common line in trying to restrain protectionist moves
by the United States.
22. In any discussions with the Six about Hong Kong in the near future, it
seems desirable not to. attempt to reach firm conclusions about the future.
treatment of cotton textiles on the grounds that this may turn out to be part
of a wider international problem which extends to all textiles, and that future
developments cannot be sufficiently clearly foreseen at this stage to make it
possible to reach agreement on the treatment of Hong Kong cotton textiles in
isolation. At some stage, however, we shall have to discuss with the Community
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CONFIDENTIAL