CONFIDENTIAL
To/=
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1. Goochfellow
with Flag A
Mr Wilford
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Des
HONG KONG: RESTRAINTS ON IMPORTS INTO THE UK OF KNITTED GOODS
8/1
1. You will be aware from our Friday Notes that the request
by British Industry for restraints on knitwear imports is
still being considered by DTI. Although DTI officials did not
consider the case adequate, Mr Anthony Grant nevertheless,
after seeing representatives of the Industry, asked the
officials to provide a formula to reassure the industry and
encourage investment.
Flag B 2.
Having
C & T Division have now prepared a revised paper.
concluded once again that there is no case for restriction,
this nevertheless proposes (paras 7 and 8) that if total
imports of certain of the more sensitive items of knitted
outerwear exceed say 30% by value of the domestic market and
if it is demonstrated that there has been significant
disruption of the UK industry, we should (automatically) be
prepared to seek voluntary restraints on major suppliers.
This in effect means Hong Kong.
3. This proposal is better than agreement to negotiate
restraints now. But it is nevertheless a substantial hostage
to fortune, not only in relation to knitwear imports but as
a precedent for action on the whole range of Hong Kong exports.
Hong Kong would undoubtedly regard the proposal as the informal
equivalent of a 30% restriction trigger point and will make a
fuss. In the case of Polyester Cottons there was at least a
respectable case for restriction; this time there is none
which we could put to the Hong Kong Government.
CONFIDENTIAL
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