The
1
1
and to liberalise all else except from the four Asian' suppliers and possibly Yugoslavia. Miss Lowne had drawn his attention to the need to consider the proposals from all ten countries and asked them not to take any action until their proposals had been received. Both Herr Ernst and Mr Ridley are going to the CTC meeting (Mr Ridley leaves Monday evening) where they will possibly be able to talk about this further. If Herr Ernst approached the Hong Kongers on the possibility of restraints, Hong Kong would play it long and would prefer in any talks to have a British presence. At the moment Hong Kong's MMF's were restricted only by France. Mr Ridley advised them not to respond to any feelers but to wait for Ernst to make a move. He did not think a British presence would prove an embarrassment.
5.
UK/Hong Kong Negotiations
Mr Carter said that although they had accepted the imposition of the present quotas on cotton textiles for this year they could not accept without further discussions that 1973 should be the same plus 1%. The Hong Kong industry was still incensed at what had happened in December and would suspect the Hong Kong Government if there was no change. They had to be seen to argue and have discussions with us. These could be combined with a move towards harmonisation. Mr Ridley maintained that there was no chance of Ministers changing the attitude they took in January. In fact it had hardened for a variety of reasons and he wondered if there was any use in going through what was most likely to be a barren exchange. However if the Hong Kongers wanted to, HMG will of course talk to them but it will lose time. We also were anxious to get things settled so that we could let our own trade know where they stand and we do not wish to hold up our EEC proposals by talking to Hong Kong. He emphasised tremendous pressures that were building-up against the Government on textiles; these were illustrated by the large number of P.Q.'s which were being laid down. Miss Welch reminded them of our other international obligations: what was given to the Hong Kongers might very well have to be given to e.g. Pakistan. No date was fixed for the talks but I gather that June 12 is not impossible.
6. No mention was made of the possibility of our restrains on polyester cottons.
2 June 1972
Copy to:
Mr Laird HKIOD
Kas Hon
K Hazle Commodities Department