You also asked for some undertaking that Hong Kong would not suffer further as a result of duty-free competition from EFTA countries.
I agreed that the next round of talks should consider all the foregoing in more detail, whilst making it clear that all these requests would raise very great difficulties for us.
When discussing the ground to be covered at the talks in January, you argued that the new Commonwealth tariff should be decalaged because commercial decisions had been entered into on the basis that there would be a tariff but no quotas. I explained that there were both policy and legislative reasons why we could not entertain this, just as we could not contem- plate deferring the introduction of the tariff, the point here being that our industry had based its investment and other commercial decisions on the assumption that tariff protection would be available from 1 January 1972.
PW RIDLEY "
Press Notice
"A delegation of Hong Kong officials held discussions on 6/7 December with Mr Anthony Royle, Parliamentary Under Secretary of State for Foreign and Commonwealth Affairs, Mr Anthony Grant, Parliamentary Under Secretary of State for Trade and FCO and DTI officials about the British Government's decision to retain the existing system of quantitative restrictions on imports of cotton yarn and woven cotton textiles from Hong Kong and other currently restricted countries. The Hong Kong officials visited London at the invitation of HG. The British and Hong Kong Governments have agreed to further talks beginning on 10 January 1972 in order to examine in more detail the implications of the decision for Hong Kong's trade in cotton textiles with the UK.
CT
8 December 1971 #1
II
HONG KONG'S REACTIONS TO THE TARIFF DECISION IN 1969
1
When the Crosland tariff/liberalisation policy was announced in 1969, Hong Kong was strongly opposed to it on the following grounds:
a
She feared that the introduction of the tariff would result in loss of the quota premium. As Hong Kong administered the quota itself, her exporters operated in a sellers' market and could (and did) inflate their prices accordingly. This situation would end with the disappearance of quotas; exporters would tend to "absorb" part of the new tariff, in an effort to maintain their share of the market, with a consequent reduction in their profitability;
2