CONTDENTIAL
cc Miss Lowne CT1 Miss Welch CT1
Miss Walters CT1 Miss Elliott CRE 1 Mr Herzig CRE Mr Hale
Mr Laird
14
Mr Pryke C$2
FCO. FCO
Ex 198
As hundert
CP Haddon-Cave, Esq
Financial Secretary
Hong Kong Government office Fire Brigade Building HON KONG
9 December 1971
་་་ ་་
19
th. 19
xii
During the course of discussions on 6 and 7 December about HMG'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, ING 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 liong Kong. In these circumstances, we agreed that further talks should take place in the week beginning 10 January 1972, and you indicated that you would like these talks to cover, in a serious and meaningful way, how the effects on Hong Kong of this new policy could be ameliorated.
To this end, you said that you would like the talks to consider the following possibilities:
Modifications in the present UK/Hong Kong quota arrangements, that is to say,
1.
11.
a once-for-all transfer of yardage into-Group IV fros Groups II, III and V (partly to recognise the changing pattern of the trade, and partly as compensation for the reduced competitiveness of fabrics);
modernisation of the categorisation of the trade covered by Group IV, perhaps in line with the categorisation in the llong Kong/EEC bilateral agreement on cotton textiles.