CONFIDENTIAL

GPS 1000A IMMEDIATE

CYPHER CAT A

FM F C O 141958Z

CONFIDENTIAL

TO IMMEDIATE HONG KONG TELNO 868 OF 14 NOVEMBER

INFO IMMEDIATE UKREP BRUSSELS.

PERSONAL FOR GOVERNOR FROM MR JUDD.

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YOUR TELEGRAM NUMBER 1123: EEC/HONG KONG TEXTILES.

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1. SINCE RECEIPT OF YOUR TUR, WE HAVE BEEN WORKING HARD IN BRUSSELS TO PERSUADE THE COMMISSION TO AGREE TO THE RESUMPTION OF NEGOTIATIONS WITHOUT UNACCEPTABLE PRE-CONDITIONS

WE BELIEVE THIS IS THE ONLY POSSIBLE WAY FORWARD.

2% WE HAVE NOW HAD AN ASSURANCE FROM THE COMMISSION THAT THEY ARE PREPARED TO INVITE HONG KONG TO RESUME THE NEGOTIATIONS. THE COMMISSION HAVE TOLD US THAT THEY NEED AN ACCEPTANCE BY HONG KONG OF THE PRINCIPLE OF CUT BACKS FOR CERTAIN PRODUCTS BELOW 1976 ACTUAL EXPORT LEVELS ON THE BASIS OF THE COMMUNITY'S CLASSIFICATION SYSTEM. THE LEVEL OF SUCH CUT BACKS WILL REMAIN TO BE NEGOTIATED. I HAVE ALREADY EXPLAINED TO YOU THAT THEY WILL BE ESSENTIAL.

3. THE COMMISSION ARE ASKING ONLY FOR A PRIVATE ASSURANCE FROM HONG KONG ON THIS POINT AND HAVE UNDERTAKEN NOT TO MAKE PUBLIC THE FACT OF ANY SUCH ASSURANCE, NOR TAKE ISSUE WITH THE HONG KONG NOTE VERBALE OF 11 NOVEMBER. IF NECESSARY THEY ARE ALSO PREPARED TO VISIT HONG KONG AND TO WITHDRAW CERTAIN OF THE STATEMENTS MADE AT THEIR PRESS CONFERENCE CN 4 NOVEMBER.

4. I TRUST THAT THE RESPONSE FROM HONG KONG WILL BE RAPID AND FAVOURABLE. I HOPE THE HONG KONG SIDE WILL NOT ATTEMPT TO SET FURTHER PRE-CONDITIONS FOR A RESUMPTION, FUBLIC RE-STATEMENT OF THE POINTS SET OUT IN THE HONG KONG

CONFIDENTIAL

NOTE

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