A
CONFIDENTIAL
ANNEX A TO XCC(71)73
DRAFT LETTER FROM MR. P.W.RIDLEY TO
MR. C.P. HADDON-CAVE
During the course of discussions on 6th and
7th December about H.M.G's decision to retain the
existing quotas on cotton textiles from Hong Kong and
the other currently restricted countries, you put it
to us that, if the Hong Kong Government is being asked
to accept that Lancashire now faces a new and
unexpected situation, H.M.G. must recognise that the
policy decision to retain quotas and proceed with the
introduction of the new Commonwealth tariff creates
a new and unexpected situation for Hong Kong. In
these circumstances, we agreed that further talks
should take place in the week beginning 10th January,
1972 and you indicated that you would like these
talks to consider, in a serious and meaningful way,
how the effects on Hong Kong of this new policy
could be ameliorated.
2.
To this end, you said that you would like the
talks to consider the following possibilities:
(a) Modifications in the present U.K./Hong Kong
quota arrangements, that is to say,
(i)
a once-and-for-all transfer of yardage
into Group IV from Groups II, III and V
(partly to recognise the changing pattern
of the trade, and partly as compensation
for the reduced competitiveness of fabrics);
(ii) modernisation of the categorisation of
the trade covered by Group IV, perhaps in
line with the categorisation in Hong Kong/
E.E.C. bilateral agreement on cotton
textiles;
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