RESTRICTED
3. WE (CANNOT ALLOW EXPORTS FROM THAILAND AND COLOMBIA TO BUILD UP WHILE HONG KONG REMAINS UNDER RESTRAINT. MINISTERS HAVE THEREFORE DECIDED THAT CONSULTATIONS ON RESTRAINTS SHOULD NOW BE HELD
WITH THE 2 COUNTRIES: GUIDELINES FOR SIMILAR ACTION IN RESPECT OF OTHER UNRESTRAINED COUNTRIES (WHOSE EXPORTS ARE SO FAR LOWER) HAVE ALSO BEEN AGREED.
4. YOU SHOULD THEREFORE REQUEST THE GOVERNMENT TO WHICH YOU ARE ACCREDITED FOR CONSULTATIONS, THE PROBLEM IS URGENT AND WE ARE ANXI- OUS TO SETTLE IT QUICKLY. WE WOULD SUGGEST THAT THEY SHOULD BEGIN ON 3 SEPTEMBER WITH THAILAND AND 18 SEPTEMBER WITH COLOMBIA, EITHER IN THEIR RESPECTIVE CAPITALS OR IN LONDON. A D T 1 OFFICIAL WILL BE AVAILABLE TO TRAVEL AT ABOUT A WEEKS NOTICE. PLEASE REPORT THE RESULT OF YOUR APPROACH AND URGE THAT A DATE FOR CONSULTATIONS BE SETTLED PROMPTLY. YOU SHOULD EXPLAIN THAT WE ARE SEEKING CONSULT- ATIONS IN ACCORDANCE WITH THE PROVISIONS OF THE GATT LONG TERM ARRANGEMENTS (THIS IS THE INTERNATIONALLY RECOGNISED MODEL) WHICH REGULATES INTERNATIONAL TRADE IN COTTON TEXTILES (THAILAND IS NOT A SIGNATORY BUT COLOMBIA IS). YOU SHOULD SAY THAT, IN ACCORD ANCE WITH ARTICLE 3 PARA 1 AND ARTICLE 6(B) OF THE LTA, HMG NOW JUDGES THAT IMPORTS OF POLYESTER/COTTON TEXTILES FROM THAILAND AND COLOMBIA ARE THREATENING TO CAUSE DISRUPTION IN THE UK MARKET AND THEREFORE REQUESTS CONSULTATIONS WITH A VIEW TO AVOIDING SUCH
DISRUPTION.
5. YOU MAY ASSURE THE AUTHORITIES THAT WE HAVE NO INTENTION OF REVOKING IMPORT LICENCES ALREADY GRANTED. THERE IS A CLEAR DANGER HOWEVER THAT ONCE CONSULTATIONS HAVE BEEN REQUESTED BOTH THAI AND COLOMBIAN EXPORTERS (AND BRITISH IMPORTERS) WILL TRY TO FORESTALL ANTICIPATED RESTRAINTS BY QUICKLY PLACING LARGE ORDERS. WE COULD NOT ALLOW THIS TO HAPPEN, ESPECIALLY AS IT MIGHT NOT BE POSSIBLE TO ACCOMMODATE ALL SUCH CONTRACTS WITHIN THE RESTRAINT LEVELS
THAT
MAY BE AGREED. CANCELLATION WOULD THEN BE INEVITABLE, WE SHALL THEREFORE ANNOUNCE ON 23 AUGUST THAT FURTHER APPLICATIONS FOR IMPORTS LICENCES FOR POLYESTER/COTTON TEXTILES FROM THAILAND AND COLOMBIA WILL NOT BE GRANTED PENDING COMPLETION OF THE CONSULTATIONS.
-2- RESTRICTED
16. A