Mr Cortazzi
PS/PUS
co: Mr Butler
Mr Fretwell
EID(E) HKGD
CONFIDENTIAL
HISK 121
RALLIÝLO
1616/1
3o. 51
14 SEP 1938
INDEX
PA
stien
Flag A
156
HONG KONG AND THE MULTI FIBRE ARRANGEMENT (MFA)
The Governor of Hong Kong has asked that the PUS should see the attached letter dated 3 September recording his grave concern at the prospects of a bad bilateral denl
on textiles between Hong Kong and the Community.
2. Briefly the European Commission is preparing for bilateral negotiations with the "low cost" textile producing. countries, and the Commissions representative, Tran Van Tinh, has been making preliminary visits to the countries in question: GCe paragraph 2 of UKREP Brussels telegram No 5121. In Hong Kour he appears to have given warning of the Commission's intentiou to negotiate cut-backs in the textile quota levels which, in Sir M MacLehose's opinion, would badly affect the Hong Kong economy and also perhaps threaten big potential British contracts in Hong Kong such as the China Light and Power Station deal in which the Prime Minister is personally interested.
3. We do not know whether what Tran has apparently said in Hong Kong will be reflected in the Commission's proposed mandat, but he is visiting London on 9 September and officials will then get some idea of the Commission's 'plans. Thereafter, Ministers will be briefed for the European Council meeting, probably on 20 September, where this matter will be discussed.
4. Assuming that Hong Kong will be faced with demands for quota cut-backs, there is much force in Sir M MacLehose'a arguments though I have asked Departments to examine his let r and enclosures carefully: it is possible that the actual effects might not be as great as he fears.
However, whil ing our own interests we also have something of a duty to help Hong Kong protect theirs; and we shall almost certainly hove to draw Ministers' attention to Sir M MacLehose's concern though I am sure it would be very difficult to get any lenses in Hong Kong's favour either in the UK attitude or in the Community mandate. This Leing so, and if officials do I en on 9 September that Hong Kong is to be faced with a nasty pre I think it would be right for Sir M MacLehose to return to the UK and present Hong Kong's case to Ministers, particularly to
Mr Dell.
+
15.
CONFIDENTIAL