Sir D Watson
CONFIDENTIAL
with s
FRIDAY NOTES: HONG KONG & INDIAN OCEAN DEPARTMENT
HONG KONG
PROPOSED RESTRAINTS ON KNITWEAR
1. DTI, Chemicals and Textiles Division, have produced a draft proposal that should knitwear imports reach 30% in value of home production, this should automatically trigger off restraint negotiations. This purely presentational proposal would be very unwelcome in Hong Kong, and would also be a bad precedent for other UK producers who are not hurt now, but who fear they may be in the future. The draft proposal is also opposed by CRE 1 (in respect of GATT and other agreements) and CRE 2. We will be discussing the proposal next week and will try to get it dropped or modified.
2. The request by Mr Ernst of the European Commission that, for juridicial reasons, we should set a figure for our knitted cotton imports following our entry, has been rejected by the DTI. There appears to be no legal backing for the Commission's proposal and we hope we have heard the last of it.
REGISTER OF SHIPPING
3. Mr Hubback, Deputy Secretary DTI, discussed the question with the Governor just before Christmas. The Governor has agreed to review the requirement and the difficulties, and Mr Hubback is writing to him accordingly. DTI have now accepted the line that we must co-operate with the Hong Kong Government and not impose a Fiat.
AIR SERVICES
[1.
DTI officials are now moving towards an offer of one service a week for SAS. This would meet the Governor's minimum political need. They have drawn back because of a rumour that SAS are about to make an offer to BOAC.
But we will try to get them to the sticking point this week.
TELEVISION
5. Tenders for the second and third channels will be invited after an amending Bill is introduced in early February. The tender period for the second channel will be three months and for the third up to nine months longer. RTV will be offered an extension of its franchise to bridge the gap until the
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CONFIDENTIAL