CONFIDENTIAL
Hong Kong Administration that as they administered the restraint system (in a sense on behalf of the UK) any obligation in the hardship field would have to be that of the Hong Kong Government to Hong Kong exporters.
7. Mr Haddon-Cave said that he wanted 10 minutes in our next meeting to give further views of Hong Kong on the multifibre concept discussed at the meeting on 12 January.
MEETINGS ON 14 JANUARY
8. We were in almost continuous session from 10.30 in the morning until 8.30 in the evening.
9. Mr Haddon-Cave said that his delegation had looked at the proposals made by us the day before which he continued to argue were only a partial application of the EEC alignment principle and therefore not what Hong Kong had had in mind in putting forward this kind of approach. His industrial advisers were only prepared to take the risk of an agreement in which they did not know how much they would get for hardship if they were able to say to all sectors of the Hong Kong industry that some modification had been made to the arrangement of benefit to each sector of their industry, i.e. up- and side-swing applied to Group II (and thence to Group IV) and that for these two Groups there should be intercategory swing. The Hong Kong Delegation submitted two alternative category lists to meet these objectives which, after some general comments which added little to our knowledge, we agreed to examine during the lunch hour. At the lunch hour meeting we agreed to vary our earlier position by splitting the difference between performance and quota levels in the new
(EEC type) Group IV. On this basis, we could agree to a 10 per cent swing into specific categories with the exception of the sensitive ones. The arithmetical effect of this would be to reduce the specific levels by 13 million sq yds but restoring to the overall total something like 9 million.
10. Mr Haddon-Cave again argued for upswing from Group II to Group IV and full cross swing between categories. We said that we could not accept this kind of approach which would create precedent problems which would make it impossible to defend the bargain on EEC grounds with other suppliers. Later we said that instead of the upswing of 4 million sq yds (which we were prepared to agree) from Group III to IV we could apply this on a percentage (5) basis.
11. The remainder of the meeting was taken up with further detailed commentary by the Hong Kong Delegation on our amended proposals; intermittent consultation between them and their unofficial advisers; discussion on the draft of a letter to be sent by Mr Ridley to Mr Haddon-Cave recording the agreement, and finally a press notice. We did not discuss either EFTA or the multifibre concept.
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/12.