CONFIDENTIAL
23
/suggested
by Hong Kong, together with
5 million square yards
COTTON TEXTILES: HONG KONG
1. The following reports the position in the talks up to the close of play on 12 January.
The
2. The sessions, which have been intermittent, have generally focussed on the two points of hardship and recategorisation/ regrouping. On the former, a working party examined information provided by 28 firms to the Hong Kong Administration. visitors claim that these (which might not be the total sum of the problem for Hong Kong) gave a figure of 15.5 million square yards plus of a million pounds. Before examining these figures, the DTI said that they had had nothing on a similar scale from British importers who dealt with Hong Kong. From the examination, it seemed that the full scope of these cases might be the 15.5 million square yards/(in the grey cloth etc. area) which showed in DTI correspondence.
3. In further discussion on hardship, Mr Ridley continued to make the following points:-
(i) (As Mr Davies said in the House) all orders placed for 1972 must be a charge on the 1972 quotas.
(ii) Hong Kong had not produced evidence to show how much
of the figure represented an excess over and above quota levels.
(iii) Hong Kong's problem had to be viewed in the broader
context of the total of excess orders (which later Mr Ridley said seemed to be at least 30 per cent of the figure for restricted yardage). In dealing
with hardship, we clearly had to base any recommendation to Ministers (it might take a while to get their approval) on the equity principle.
Mr Haddon-Cave agreed that it was less easy to argue against this principle when dealing with hardship arising from excess ordering.
4. On 11 January, we put to the visitors the various proposals in the brief for recategorisation/regrouping. Mr Haddon-Cave's initial reaction was that these were "little and very moderate". He argued further that if we were following the principle in making these suggestions that merging of categories and groups could take place where there was a pronounced under-performance in specific areas, we should go to the end of this logic and make appropriate changes in Categories 3, 5, 11, 14, 15, 17, 18 and 20! He agreed to reflect and the fruits of this reflection are given in the following paragraphs.
CONFIDENTIAL
15.