CONFIDENTIAL AND PERSONAL
It
important for Hong Kong to understand that pressures
on British Ministers to provide further protection for the.
nitionen
textile industry are both serious and will increase so-
long as import penetration of the UK market continues to
grow.
3. It is clear that the MFA as it stands has provided
insufficient safeguards against the market disruption
which is considered here as being the major problem
facing the textile industry. The expectations for
world trade expansion, which led HMG and the Governments
of other textile producing countries to accept the
present MFA, have simply not been realised and therefore
the growth rates we have accepted so far are probably
not sustainable in the short term. The Community will'
to seek f
need action to provide for further protection.
netwaling
quotas
4. I know you are concerned about the possibility of a
cutback in Community growth rates on Hong Kong's textile
exports, You have rightly made the point that these..
growth rates are in practice telatively by low at present.
I
Given the pressum feve
am afraid that, I cannot give you the
A
unqualified
assurance you would like that the Community will not -
propose any further cutback for Hong Kong.. AFT Vaidy
possibilities are still being examined by the Community
on the future of the MFA and no decisions have yet been
reached. Nevertheless, my personal opinion, and I would
be grateful if this were not given wide currency in Hong
Kong since I am not sure how far it will prevail, is that
will not in fact propose arrangements which will result in, the Community has little room for any significant
(the imports
ongo
reduction of its exports from Hong Kong, and that the
necessary reduction in growth will have to come from
There is some head of Steam in the Community directed at obtaining increased protection at the expense of the the large trati suppliers.
CONFIDENTIAL AND PERSONAL
15. /other