TNAG-0047-FCO40-83-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 43

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difficulties with our own textile industry, and not be in Hong Kong's best interests, if we were to ask for reductions in the c.e.t. or an increase in the Community's total intake of low cost cotton textiles.

4。 For its part the British industry, and indeed certain of those of the Six, would of course be delighted if one result of British entry into E.E.C. were to be a reduction in the total intake of low cost cotton textiles. But the British industry would in practice be content with an arrangement by which we adopted the c.e.t., the enlarged Community's total intake remained unchanged, and textiles moved freely within the Community. Lancashire would however strongly resist the idea that the administration of quantitative restrictions should be changed so as to admit a higher proportion of finished goods from Hong Kong. He would expect this view to be shared by the industries of the Six.

5. The sort of arrangement he had outlined would of course mean an increase in the intake of low cost cotton textiles into the Six, and they might well seek to avoid this. But he was more optimistic than the Hong Kong Delegation about the strength of the British negotiating position. If it were left to the Community to take the initiative on this issue, they would clearly find it embarrassing to take an illiberal attitude in the face of opinion in U.N.C.T.A.D. and elsewhere. No country had ever succeeded in reducing substantially its imports of low-cost toxtiles. Mr. Gildea added that the natural and

'Communautaire' solution for low cost cotton textiles after British entry would be for national quotas to be added together and for goods to move freely within the Community. If the Six wanted other arrangements, the onus would be on them to justify these.

6. Mr. Ord-Johnstone said that while the Six were feeling their way towards a common commercial policy for imports of low cost cotton textiles, they had not made much progress yet. As for Hong Kong's fears about what might happen in 1970, it was not the intention of the British Government that our regime for imports after 1970 should be more restrictive. Indeed, we had tried to make it clear to the industry that it should be less so. Mr. Ord-Johnstone thought it almost certain that by 1970 arrangements continuing or replacing the L.T.A. would have been agreed. He went on to say that the picture might well be radically changed by 1970 by developments within the textile industry. In the next four years there was likely to be an enormous increase in British production of very cheap grey cloth, originating from the new industries to be established in Skelmersdale and Cumberland. Another likely development was that by 1970 governments would be more concerned by the question of man-made fibre textiles from developing countries which could well overshadow the issue of cotton textiles, The British Government had however no intention of changing its policy on imports of man-made fibre textiles. Mr. Haddon-Cave said that in this context the United States was likely to seek an extension of the definition of the textiles covered by the L.T.A.

7.

Mr. Ord-Johnstone said that his present feeling was that the best British tactic in negotiation would be to say as little as possible about textiles, and leave the Six to raise the subject. He felt that there was quite a good chance that we should in this way attain our objectives. Mr. Haddon-Cave felt that this was perhaps optimistic. It was agreed that tactics on cotton textiles should be further discussed at the final session.

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