:
From the
Parliamentary Secretary
Peter Blaker Esq MP
House of Commons
London SW1
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DEPARTMENT OF TRADE AND INDUSTRY 1 VICTORIA STREET
LONDON SWI
01-222 7877
Commodition Dept
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3 January 1972 Fit
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Dear Mr. Blaber,
Thank you for your letter of 22 December, 1971, which reports on the points made by the Hong Kong Association at a meeting with the Anglo-Hong Kong Parliamentary Group.
The arguments put by the Association have in the main already been very fully discussed at meetings in December between officials from my Department and from Hong Kong. As you know, these talks are to be resumed on 10 January. I acknowledge that the eleventh hour decision to retain quota controls on cotton textiles is bound to cause some disruption of the plans of overseas suppliers and UK importers alike; but, as John Davies explained in the House, a series of unexpected last minute developments made this decision unavoidable. I think it only right to point out that Hong Kong, with her very large quota (almost 200m sq. yds. in 1972) will continue to be our major supplier of cotton textiles; her share of the UK market will · continue to be protected from encroachment by lower-cost suppliers such as S Korea and Taiwan (as would not have been the case under liberalisation); and the profitability of her consignments (which she complained would be diminished under a tariff and no quotas) is likely to be maintained. Already we have had a good many complaints from importers, that, since the statement on 8 December, Hong Kong exporters are insisting upon raising the prices in the 19/2 contracts already negotiated.
On the question of the treatment of cotton textiles in an enlarged EEC, I do not think there is anything I can add to Nicholas Ridley's letter to you of 20 December.
I attach the information you wanted on the EEC import regime for textiles, and I am copying this as you requested to Dan Jones and Brian Walden. I doubt whether there is much more we can say before the 10 January but if you would like a meeting with a D.T.I. Minister we will gladly arrange it.
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