CONFIDENTIAL
3. YOUR COMMENT IN PARA 5 REGARDING THE FAVOURABLE TRADE BALANCE
ENJOYED BY SWITZERLAND SUGGESTS A BASIC MISUNDERSTANDING OF THE
SITUATION. BILATERAL TRADE RELATIONS BETWEEN HONG KONG AND
SWITZERLAND ARE GOVERNED, AS FAR AS THE TEXTILE TRADE IS CONCERNED, BY THE PROVISIONS OF THE GATT MULTI FIBRE ARRANGEMENT.
SHOULD THE SWISS AUTHORITIES FIND IT IMPOSSIBLE TO CONTINUE TO
RESIST PROTECTIONIST DEMANDS (WHICH ALREADY EXIST AND WHICH COULD
BE FIRED BY RESENTMENT OVER SWISSAIR SERVICES) THERE WOULD BE NO QUESTION OF HMG BEING ABLE TO RESIST ANY ATTEMPT BY THE SWISS TO CALL HONG KONG (REPT) HONG KONG TO THE NEGOTIATING TABLE AND SEEK
RESTRICTIONS ON EXPORTS. WE WOULD BE BOUND TO RESPOND. AND ON CURRENT
FIGURES THE SWISS HAVE A STRONGER CASE THAN MANY TO WHICH
WE HAVE HAD TO CONCEDE OVER THE LAST YEAR.
4. WE THEREFORE URGE THAT AN ALTERNATIVE COURSE TO CUTTING
BACK SWISSAIR'S SERVICES SHOULD BE ADOPTED.
BERNE PLEASE PASS COPY TO LATHAM
MACLEHOSE
FILES MAED
HK & GO
WED
MISS BROWN
MR MURRAY MR FERGUSSON
COPIES SENT TO CAD/DOT/
COPIES TO
HONG KONG GOVT OFFICE LONDON
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