CONFIDENT I AL

in hand which would bring Hong Kong's new quotas much nearer to 1976 levels than were those proposed in the initial offer. (This must remain confidential for the moment).

Hong Kong is much incensed by a tough press statement which Tran van Thinh, the Commission Chief Negotiator, made on Friday. 4 November and there is currently a real risk of a breakdown. But I hope tempers will cool and I see no reason why a satisfactory bargain should not be struck in the Hong Kong negotiations.

8 November 1977,

JA Stern

European Integration Department (External)

CC:

Mr Butler

Mr Murray

Mr Hall

Stewart HKGD

Mr Winchester SED

Mr O'Neill SAD

Mr Simons SEAD

Mr Ure SAmD

Mr Elliott

UKREP Brussels

4

CONFIDENTIAL

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