CONFIDENTIAL
45
VISIT OF THE CHANCELLOR OF THE DUCHY OF LANCASTER TO HONG KONG
September 1972
HONG KONG: POLYESTER COTTON TEXTILES
1.
In July the Prime Minister endorsed Ministers' view that
British industry had made a case for the temporary restraint
(until 1976) of imports of polyester cottons from low-cost Asian
sources. These came almost entirely from Hong Kong but clearly
any restraint would have to cover other exporters namely the
Republic of Korea and Taiwan (Japan is already restrained).
2.
A team from the DTI and FCO accordingly went to Hong Kong
and Seoul in August.
3. The case presented was based on the under-utilisation of
British industrial capacity in this new industry due to rapidly
increasing imports especially from low-cost sources with which
the UK industry could not compete. Despite considerable
concessions being offered in the hope of reaching a voluntary
agreement there were no corresponding moves from Hong Kong's original opening position. (South Korea was even less forth-
coming). It was agreed that the UK team would report back.
4. The present position is that Hong Kong (and South Korea)
will be invited to send a team to London to take up the
discussions where they were left off. It is to be hoped that
agreement can be reached which, whilst it affords the UK
industry the breathing space it requires, will at the same time
not inflict undue hardship on the Kong Kong textile industry.
Given understanding on both sides a compromise should be possible.
CONFIDENTIAL
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