CODE 18-77
CONFIDENTIAL
3 Hong Kong would entertain proposals for restraints on individual non-cotton products if these could be justified on injury grounds. They would favour combining quotas for cotton and non-cotton products. The cotton element would be taken out of the existing cotton textile agreement.
In effect,
one might envisage the establishment over a period of a series of LTA Article 3 Agreements covering particular products, which in due course might be merged into a single multi-fibre agreement. Mr Haddon-Cave appreciated (as he had done in negotiating sessions) that, if we ever introduced non-cotton restraints, we would need to safeguard ourselves against speculation to build up performance during the immediately preceding period; the idea of taking 1971 as a base year did not seem to bother him. He said nothing about the application to other countries of any restraints on Hong Kong..
4 Following the 'constitutional' breakdown of the talks on Friday evening, Mr Haddon-Cave reverted briefly again to non-cotton textiles, wondering whether some combination of restraints might not provide a way out of the impasse we had just reached.
DR
P W RIDLEY
CT Division
18 January 1972
MT Rm 1107 Ex 198