CONFIDENTIAL
Alleged,
was being asked of Hong Kong was that they should favour UK suppliers even though it is assumed that the Japanese would be cheaper. It was expecting a lot of Hong Kong to ask them thus to discriminate in favour of the UK at the same time that we were apparently urging our fellow EEC members to discriminate against Hong Kong's textile exports.
4. Mr Jordan also made the point that the proposal to reduce Hong Kong's textile quota in order to improve access for the least developed countries was not likely to achieve the desired effect since he doubted whether such countries would be able to produce goods of the required quality. Importers would thus be forced to look elsewhere to make up for the shortage in supplies from Hong Kong and would end up buying expensive goods from those developed countries such as Japan, Austria and the USA who were not subject to quota limitations. Thus, the effect of our policy would be to increase prices for the British consumer and to penalize Hong Kong, while benefiting our prosperous rivals, and doing nothing either for the British textile industry or for the least developed countries.
5. I realize that Hong Kong's problems do not rank very highly among the preoccupations of our delegation in Brussels. But a specific undertaking was given to Sir Murray MacLehose by our Ministers that we would try to help them. It would be helpful, in talking with people like Mr Jordan, if we could at least know what steps have been taken to honour that undertaking.
1
I am sending with this minute copies of two recent telegrams
played, from the Hong Kong delegation.
3 November 1977
CC:
Mr Murray Mr Mellon
TRED)
JA B Stewart
Hong Kong & General Dept
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CONFIDENTIAL