TNAG-0108-FCO40-144-Briefs-for-Members-of-Parliament-visiting-Hong-Kong-1969 — Page 25

4.

There was a fairly strong reaction to this decision in

nóng Kong. While the local textile industry is understandably

uncertain as to precisely how these changes will affect its trade

with the UK when they are made in 1972, it is concerned about the

reverse preferences they will create in favour of the EFTA countries

favour (particularly Portugal) and the Irish Republic who will continue to

f

The

enjoy duty free entry. But its sense of grievance centres

principally on the point that it was not consulted before the

British announcement was made. In fact none of the countries

concerned were consulted, because prior consultation was considered

impracticable given the number of countries involved. President stated in Parliament that the tariff proposal would be

fully discussed with the countries which enjoy contractual rights

to duty-free entry and that he would be prepared to listen to the

views of other Commonwealth countries and territories.

Hong Kong

falls in the latter category and the President has specifically

indicated in separate exchanges his willingness to hear the

Colony's views.

5. It seems unlikely that the substitution of the tariff will do

any real harm to Hong Kong's trade in cotton textiles with the

UK, although there may be changes in the pattern of that trade. The change could, even be beneficial if the Hong Kong industry succeeded in "trading up" into the higher quality and higher value clothing sector (which already accounts for 68% of its textile exports to this country).

1 Nevertheless there is concern in

4

Hong Kong lest at some future date we might find it necessary to reimpose quotas with the result that the Colony's exporters would

be faced