TNAG-0120-FCO40-156-Lord-Shepherd-s-visit-1969 — Page 110

CONFIDENTIAL

VISIT OF MINISTER OF STATE LORD SHEPHERD)

TO HONG KONG MAY/JUNE 1969

Note No. 11

REPORT OF THE UNITED KINGDOM

TEXTILE COUNCIL

The Textile Council's study of the productivity and efficiency of the Lancashire textile industry was published at the end of March and has caused considerable comment in

the press in the UK and in Hong Kong. In Hong Kong there is a tendency to associate the Board of Trade closely with the Textile Council's recommendations (which look to the enhance- ment of the productivity and competitiveness of the Lancashire industry). But in fact although Board of Trade officials took part in the work of the Council's Executive Committee and other Committees concerned with studying the industry they were there only to act as assessors. They were not concerned with the conclusions and recommendations of the report and there is thus no question of HMG being committed in any way to accepting those conclusions and recommendations.

2. The Textile Council recommended inter alia the imposition, after a transitional period, of a tariff of 15% on cotton tex- tiles from Commonwealth sources. This would be in conjunction with arrangements to remove the existing quota restrictions

Hong Kong has an individual country quota which is better for her than competing under the global quota would be. These are the most important recommendations from the point of view of Hong Kong and the feeling there is that insufficient con- sideration has been given to the many important potential consequences of that recommendation.

3.

At this stage the answer to the inevitable expressions of criticism and alarm is that it is the Textile Council and not the Government which carries responsibility for this recommendation. HMG will be carefully reviewing the issues - external and domestic raised by the recommendations in the Report before contemplating any action. For the Minister's own information. There will be inter-departmental discussions,

CONFIDENTIAL

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