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(vi) (subject to a performance basis) a 10 per cent
swing between categories in Group IV;
(vii)
no upswing from one category to another;
(viii) to raise the quota level for corduroy, on an
ad referendum basis, to 1 million square yards.
3. At the meeting in the afternoon with Hong Kong, Mr Ridley introduced these proposals saying that in approaching the Hong Kong suggestions we had had to bear very much in mind the basis for the British Ministerial decision. This was that quotas could be increased by 1 per cent but within the current product/ source pattern and that there should not be derestriction which had the effect of increased sendings for particular products, i.e. sensitive areas. We had tried to be constructive within these constraints and hoped that Hong Kong could agree to the amended EEC proposal.
4. After general comments, Mr Haddon-Cave (following a caucus with his delegation) said that in making their EEC proposal they had expected it to be taken as a whole. Britain could not tinker with it, agreeing to the bits that they wanted.
Mr Ridley said that with the minor exception of our not agreeing to the inclusion of bleached cloth in Group 2, and certain other facets which were neutral as far as Hong Kong was concerned, our proposition was more or less on all fours with the Hong Kong initial proposal (the significant difference was in upswing but given the narrower EEC categorisation even this was not meaningful).
5. Mr Haddon-Cave then asked for creeping swing; an increase in corduroy (as will be seen from above we agreed this ad referendum); merging Groups XI and XIIA and increasing the limits for Categories 4 and 7. (We refused both of these proposals given that the items are particularly sensitive.) Finally, Mr Haddon-Cave asked, and we agreed to think about it, for Categories 3 and 10 to be combined. Hong Kong were to examine these proposals overnight and we resume at 10.30 on 14 January.
OTHER POINTS
6.
On hardship, as agreed at our briefing meeting, Mr Ridley repeated that this was a very big general problem on which we would need to submit to Ministers. However, if we could do anything generally on this we would certainly do what we could for Hong Kong, having particularly in mind the way in which Hong Kong administered its restriction system. However the problem had to be looked at in aggregate and we could certainly not put a figure on it at this time. The only comment made by Mr Haddon-Cave was that we should recall the firm view of the
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/Hong