Hin. Welcn CT1
Miss Walters CT1
Miss Elliott CRE 1 Mr Herzig CRE
Mr Hale
Mr Pryke CT2
Mr Laird
FCO. FCO
Ex 198
1. L'
C P Haddon-Cavo, Esq
Financial, Secretary
Hong Kong Government Office
Fire Brigade Building
HONGKONG
9 December 1971
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During the course of discussions on 6 and 7 December about HMG's decision to retain the existing quotas on cotton textiles from Hong Kong and the other currently restricted countries, you put it to us that if the Hong Kong Government is being asked to accept that Lancashire now faces a new and unexpected situation, MG must recognise that the policy decision to retain quotas and proceed with the introduction of the new Commonwealth tariff creates a new and unexpected situation for Hong Kong. In these circumstances, we' agreed that further talks should take place in the week beginning 10 January 1972, and you indicated that you would like these talks to cover, in a serious and meaningful way, how the effects on Hong Kong of this new policy could be ameliorated.
To this end, you said that you would like the talks to consider the following possibilities:
Modifications in the present UK/Hong Kong quota arrangements, that is to say,
11.
a once-for-all transfer of yardage into Group IV from Groups II, III and V (partly to recognise the changing pattern of the trade, end partly as compensation for the reduced competitivenesc of fabrics);
modernisation of the categorisation of the trade covered by Group IV, perhaps in lino with the categorisation in the liong Kong/EEC bilateral agreement on cotton textiles.
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