CONFIDENTIAL
DTI with a request for restraints on polyester cottons.
Hong Kong supplies 42% of UK imports of polyester
cottons; only 5% come from other developing countries
The remainder are supplied by developed countries,
against whom it is considered impossible to impose
restrictions (they would retaliate!). Hong Kong
prices are considerably cheaper than our own and the
quality is better; but so are those from developed
countries such as West Germany and the United States.
The restrictions would therefore be aimed almost
entirely at Hong Kong. The DTI are seeking agreement
of their ministers in principle to the imposition of
restraints on such imports from Hong Kong. We have
emphasised to them the importance of taking the
Government of Hong Kong fully into our confidence and
not presenting them with a cut-and-dried decision.
EEC Textile Policy
3. The DTI have prepared a draft memorandum for sub-
mission to the Commission about the philosophy which
should underly the enlarged Community's textile poli-
cy. It is a liberal document and has general FCO
support; it is much more liberal than proposals sub-
mitted by the British Textile Employers' Association.
It proposes a new Long-term Agreement. In cases
where restrictions on textile items are to be phased
out by the end of a transitional period, it suggests
that import quotas should gradually be levelled up.
In other cases, where restrictions are not to be phased
out in short-term, a more complex but still liberal
formula would apply. The Commission have been propo-
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