in 1971, but arriving in Britain in 1972.
4.
A decision not to give relief from duty for the first three months of 1972, which the Chancellor of the Exchequer's refusal to give space in the Finance Bill will lead to unless Ministers can find time in the Legislative programme for a very short Bill, will inevitably add to the discontents of those in Hong Kong, in particular the unofficial members of the Governor's legislative council, who already resent the decision to impose a tariff.
5. A decision not to give temporary relief from duty now would come at a bad time. Our negotiations with Hong Kong over the size of their contribution for the next five years to the cost of their defence are not going well. The Governor has reported that one of the main reasons for this is "the resentment which has accumulated over the last 15 20 years and more especially over the last 8 years or so, over actions by HMG of various kinds which have appeared locally to constitute a disregard for Hong Kong's needs, rights and vital interests".
6. India and Pakistan have always objected strongly to the decision to impose tariff duties on Commonwealth cotton textiles. We are about to have talks with the Indians (on 5 and 6 May) in an attempt to obtain from them the necessary waiver of their rights under the Trade Agreement. In India's case, also, therefore, the timing is inopportune.
RECOMMENDATION
7.
Since the choice lies between the inconvenience of including provision in the Finance Bill for temporary relief from the new tariff, with all the advantages which such provision would lead to, and the resentment which failure to provide temporary relief
CONFIDENTIAL