Prime Minister
SECRET
X611
SELECTIVE IMPORT CONTROLS AND THE HONG KONG DEFENCE COSTS AGREEMENT
I have seen copies of minutes on this subject from Bill Rodgers and Denis Healey. In this context I am particularly (449) 449) concerned about Eric Varley's minute to you of 8 December. 2. I agree with Eric Varley that the import situation in the field of Hong Kong shirts is serious and would like to be able to recommend action to reduce sendings in 1976. But I also agree with Peter Shore (his minute of 10 December to you) that it would be out of the question to impose new overt import restrictions. Apart from the other complications there would be strenuous Community objections. As for bilateral pressure- on Hong Kong not to fulfil their quota, I think we must accept the Governor's view that this would not work. Nor, could we impose export restrictions on them. Either of these courses might also give us trouble with the Community.
3.
I therefore think that we must now rule out the question of action on Hong Kong shirts. The sooner we tell the Governor that we have done so, the sooner we can announce the Hong Kong Defence Costs Agreement, the importance of which Denis Healey has underlined.
4. I am copying this minute to the other members of OPD, the Secretaries of State for Trade and Industry and Sir John hunt.
12 December 1975
(DÁVID ENNALS)
(Approved by the Minister of State
and signed in his absence)
SECRET