CONFIDENTIAL
god. 1
4.
Fortunately we are not alone in thinking that the
proposal goes too far. CRE 1 and CRE 2 are strongly opposed
to the concession in view of the principle involved. То
accept that any particular level of import penetration
automatically entailed negotiations for restraints would
have repercussions throughout British industry. It would
make nonsense of our proposed policy in the EEC and of
our GATT undertakings.
5.
Mr Goodfellow has spoken to the DTI and put over our
view. The matter will now be discussed at a DTI meeting on
Tuesday afternoon, 9 January already called to discuss future
overall textile policy in the EEC. I will attend.
6. Although the idea of a percentage import penetration
trigger may well be rejected, DTI Ministers clearly see a
political need for action. It would be wise to suggest a
formula at the meeting which could satisfy the industry without
unnecessarily alarming Hong Kong. The line I propose is that
the industry be told they do not have a case at present; that HMG is aware of their anxiety and has asked the Hong Kong
Government to monitor exports of these items; and that if
imports expand to an extent where substantial difficulties
arise for the industry we should be prepared to consider
sympathetically a request for immediate negotiations. We
could also say that we have drawn the Governor of Hong Kong's attention to the industry's representations and are discussing with him what other steps can be taken to keep exports at an
/acceptable
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CONFIDENTIAL