CYPHER CAT/A
FM HONG KONG 293415Z
SECRET
SECRET
(66)
Tur CUP)
TO ROUTINE F.C.O. TELEGRAM NO. 291 OF 29TH APRIL 1971.
MY TELEGRAM NO. 253 TO YOU.
RECEIVED IN REGISTRY No.51
LAST
REF.
DEFENCE CONTRIBUTION.
COAPR 1971
HICKLIO
ต
THERE WAS A SLIGHTLY UNPLEASANT LITTLE EXCHANGE WITH UNOFFICIAL MEMBERS AFTER THE EXECUTIVE COUNCIL MEETING ON 23RD APRIL WHICH LEADS ME TO SUGGEST SOME EXPANSION OF THE PROPOSAL AT PARA. 5 OF MY TELEGRAM UNDER REFERENCE.
2. P.Y.TANG, WHO HAD JUST RETURNED FROM THE U.K., EXPRESSED FRESH CONCERN AT THE EFFECT ON HONG KONG OF THE 15 PER CENT TARIFF ON COTTON TEXTILES, IN LIEU OF QUOTA, WHICH IS TO BE
IMPOSED. IT WOULD MEAN A LOSS OF SOME DOLLARS 60 MILLION A YEAR TO THE HONG KONG ECONOMY, WHICH OUGHT TO BE TAKEN INTO ACCOUNT IN ESTABLISHING THE LEVEL OF THE DEFENCE CONTRIBUTION, WOULD ALMOST CERTAINLY BE FOLLOWED BY QUOTAS IN ADDITION (INEVITABLY, IF THE U.K. JOINS THE COMMON MARKET), WOULD NOT HAVE THE BENEFICIAL EFFECTS ON THE U.K. INDUSTRY CLAIMED FOR IT THE INDUSTRY HAVING ALREADY HAD ENOUGH TIME (12 YEARS OR SO) SINCE RESTRICTIONS HAD FIRST BEEN IMPOSED BUT HAVING FAILED TO MAKE USE OF IT. IN SHORT, HE REHEARSED THE ARCUMENTS WE HAVE ALREADY USED OFFICIALLY, BUT HIS MAIN POINT WAS TO ASK WHETHER THE HONG KONG GOVERNMENT COULD NOT MAKE A CONCERTED EFFORT WITH OTHER COMMONWEALTH GOVERNMENTS, E.G. INDIA IN PARTICULAR (AS SUGGESTED IN PUBLIC HERE THIS WEEK BY THE INDIAN MINISTER OF FOREIGN TRADE), TO PROTEST THIS MEASURE FURTHER.
3. THE FINANCIAL SECRETARY AND I ENDEAVOURED TO EXPLAIN THAT H.M.G.'S DECISION WAS A FIRM ONE AND WE HAD BEEN UNABLE TO MAKE ANY IMPRESSION WITH SIMILAR ARGUMENTS DURING PREVIOUS DISCUSSIONS. IT WAS UNLIKELY THAT AN ATTEMPT AT CONCERTED ACTION OF THE KIND PROPOSED WOULD HAVE ANY RESULT.
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