CODE 18-77
NGOLNICIBU
1242
TUCC 040/24 1
Mr Lewington ECD (E)
1.
21 FEB 1985
-*
7.
RENEWAL OF THE MULTI FGØRE ARRANGEMENT
Refere
waha
ра
!.
Your minute
of 14 February
and telephone call of 15
February.
2.
The draft letter enclosed with your
minute refers to the two key points for Hong Kong,
i.e.
that as one of those hurt most by the MFA (paragraph 13 of the DTI draft paper) it has a strong interest in liberalisation, and that we must also take into account the recent agreement with China about Hong Kong's future in considering options which will affect Hong Kong's
trade.
3.
On the first of these points it i s plain, given the
territory's dependence on international trade
and
the
importance of the textiles and clothing sectors, that it is in Hong Kong's interests that there should be no
strongly renewal of the MFA restrictions
in
restrictions
and
for
an
end
We must
to
the
at the end of 1986. expect the Hong Kong Government to lobby hard for this. Failing full liberalisation, they may be expected
to press for a reduction discriminatory system which in effect penalises Hong Kong and some others for their competitiveness
and for eschewing protectionism. They would certainly react badly to variation" (c) in paragraph 20 of the DTI draft
discrimination in favour
of poorer LDCs
-
"possible further
and also to variation
(a): clothing and clothing accessories exports are worth much more to Hong Kong than textile exports( The clothing sector is the largest single sector within the Hong Kong manufacturing industry, employing some 284,000 workers, 33% of Hong Kong's industrial workforce) All these points might be brought the analysis you suggest of
you suggest of the likely approach of the NICs.
4.
in
be
The second point, concerning the Agreement, should also covered
in the DTI paper. The point to make here is that if the UK were to endorse me a sures which further restrict Hong Kong exports, especially if these were to discriminate against Hong Kong in favour of other places of origin, we should be open to the charge (from
(from Hong
Hong Kong itself or China) that we were going against the spirit of the Agreement, by which HMG and the Chinese Government agreed
on the object of maintaining Hong Kong's stability and prosperity.
5.
In this connection, you should also be aware of paragraph 4 (a) of Annex II of the Agreement, dealing with the Sino/British Joint Liaison Group, which will be established later this year. I attach a copy of the Annex for your reference. A s you
Hong Kong's future participation
in the
see,
can
MF A
is
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