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with other countries on non-cotton restraints over the last three years or 80. Indeed, I can recall your presence at talks with Rodney Grey in my office in Geneva as far back as April, 1967, as well as the Swedish and Norwegian talks in Stockholm and London last year in which you played a prominent role and utilised some of the above arguments yourself to good effect. I find it most surprising, therefore, that you should forget all this and should accuse Hong Kong of following an approach in these matters which is very different from the one she has in fact followed for some years. For instance, your statement that "Hong Kong accepted the validity of the one-market concept in negotiations with Norway, Sweden and Canada" is just not true, as the above shows.
6.
I next turn to your reference, in the first paragraph of your letter, to David Jordan's remarks in his preliminary comments on the PCO paper and in his letter to Bill Hughes of 20 August. The point about these is that they have to be read in the context in which they were made, namely United States' pressures for comprehensive bilateral arrangements on non-cotton textiles with their main Asian suppliers, including Hong Kong. Naturally, we are all agreed that it will be fine if we can avoid conceding anything at all to the Americans and we are at one in agreeing that, on economic grounds, the U.S. has no case of serious injury on any product comparable to the ones Hong Kong (and others) have conceded in the cases of e.g. Norway, sweden and Canada. Least of all have the Americans made out a case for a comprehensive bilateral. But if for one reason or another (Japanese weakening, the imminent threat of Congressional action, etc.) it becomes clear that something needs to be done the Hong Kong Governmet has to adopt the realistic attitude of what best to do to safeguard the Colony's trading interests in the changed circumstances.
7. All we are saying in this context is that, if the worst came to the worst, a widening of the LTA to include at least some other fibres or blends would be less objectionable from Hong Kong's point of view than a separate bilateral on non-cottons or the conceding of item by item, fibre by fibre restraints to the U.8. covering a significant number of items on a very weak case. We then say that, in such an eventuality, it would again be in Hong Kong's interest to obtain roll in between her large cotton quotas and any new non-cotton ones. In the sort of situation which we may have to face with the Americans this is a perfectly logical and consistent position to take and it does not in any way contradict the policy followed hitherto in very different circumstances. The point to underline, however, is that it is postulated on the basis of a hypothetical situation which has still not yet come about. If and when it does the position will be different and if HMG BO wished, I am sure the Hong Kong Government would then be ready to examine with you the implications for the U.K. market, bearing in mind the terms of such international instruments as may then exist.
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