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be over-impressed by the implied threat in the Governor's
letter.
10.
As for the repercussions on the US Textile Agreement,
it is true that the US chief textile negotiator has written
a letter to the Hong Kong Government suggesting the US will
have to reconsider its position if a third country concludes
a more favourable textile deal with Hong Kong. But a downward
revision of the US/Hong Kong Agreement would inevitably entail
a similar downward revision of any new Community/Hong Kong
Agreement. The Commission have made this clear to the
Americans who would be reluctant to risk the protectionist
spiral this would entail.
11.
Although Hong Kong will be asked to accept cuts in
its exports, the Commission claim, and have assured us in a
private meeting at the FCO on 9 September. that:
(a)
(b)
the cuts for Hong Kong will be proportionately
no greater than those for South Korea and Taiwan.
without cutting supercompetitves) major suppliers
there will be no room within the global ceilings
agreed by the Community to admit new supplies or
provide more lenient treatment for existing major
developing suppliers eg India and Pakistan.
The Commission negotiator, Tran has however also confirmed to
me that he has left some room for manoeuvre in his negotiations
with all the supplying countries, especially Hong Kong and
South Korea. Hong Kong might thereforehope to get terms which
are a little better than those currently on offer.
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