PS/PUS

сс Mr Cortazzi

Mr Butler

Mr Murray

Mr Milton

HKGD

Mr O'Neill

Mr Jenkins EID(E)

HONG KONG AND THE MULTI-FIBRE ARRANGEMENT

1.

Mr Jenkins's minute below comments on the three points raised by the PUS on 6 September. I have discussed this with Mr Murray; and the PUS might like to have a word with us if he has time on 8 September.

2.

We shall be able to give better advice to Sir M MacLehose and,

if necessary, to Ministers after the discussions with Mr Tran on Friday. We shall be working within narrow limits if we try to secul improved access for Hong Kong: the pressure from the UK textile industry and unions to control and if possible cut back textile imports is very strong. We do, however, have one strong point to put to Mr Tran and to use more generally in discussions in Whitehall and in Brussels: if the Community cannot reach an agreement with Hong Kong it will be that much harder to reach a bilateral agreement with any other supplier, and the whole concept of a comprehensive series of bilateral agreements may crash to the ground.

Not everyo. would be sorry if this happened, but the argument will carry weight with some.

3. I agree with Mr Jenkins's recommendation that we should make this point. Following the talks with Mr Tran we should make our ow assessment of the likely impact of the Community's proposals on Hong Kong and should telegraph our comments to the Governor. I think we could do this without risking a breach of confidentiality about the Community's negotiating mandate, although this is obviously a point of some delicacy. When we see what is likely to be offered to Hong Kong I will ask the Department to resubmit advice on whether the

Governor could usefully fly home for discussions. I doubt whether he could hope to secure any significant shift in British policy, still less in that of the Community as a whole, but it might be

/presentationally

CONFIDENTIAL

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