7

b. te

quotas.

placst with other countries

We argued that many orders) would not be accommodated. Nevertheless we said that if HMG decided that in principle we could allow hy excess licensing for pre-existing orders, we would give sympathetic consideration to Hong Kong's claims. 16. We said we were also prepared to discuss with British industry and the EEC, and thereafter to submit for Ministerial approval, certain amendments and modifications to our Cotton Textile Agreement with Hong

Although these modifications would not have given Hong Kong a bigger quota either in aggregate o in specific-products] they would have permitted greater flexibility in transfer between categories. We also offered to redefine garment quota headings to bring them more into line/with Hong Kong's agreement with the EEC (again a method allowing greater flexibility to Hong Kong).

Kong.

خير

12. Mr Haddon-Cave agreed with these proposals but his

trade advisers did not.

proposals care

The letter is to be considered

by the various Hong Kong bodies, including the Executive Council.

We hope that en reflection Hong Kong will posts the really big effoft we made to reach a solution; that they will accept that the greater flexibility for their trade corned in our proposals (which will

nable them to export more in entegoring which inberoob them most) will cause then tio nocort the

have offered. wir

pot aprechent-in Fujechall to any stig.cant improvement-a

36

was wado cieap w

the talks broke up that any resumed consultations we would have

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Start again from the beginning, not on the basis

proposals.

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