TNAG-0144-FCO40-180-Exports-of-textiles-to-United-States-of-America-1969 — Page 111

S.S.

mentioned above, this might give to Mr. Stans the impression, or enable him to put on the situation the interpretation, that Hong Kong was not in the last resort opposed to the extension of the L.T.A.

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Our advice to Hong Kong should therefore include sone stiffening of Hong Kong's initial, opposition to the extension

of the I.T.A.

This

5. With regard to voluntary export restraints, it seems advisable to warn Hong Kong of the position under United States legislation i.e. that the U.3. Administration have authority to impose quotas only where there is a pre-existing bilateral arrangement, or a multilateral arrangement, and that the Administration take the view that there is no use making a gentleman's agreement with other countries if the United States has no power to enforce the agreement by means of quotas, means that the United States Administration evidently feel themselves to be in a very weak negotiating position in suggesting voluntary export restraints, unless they have some- thing like an extended L.T.A. already in existence. There is also apparently the possibility that by entering into something which the United States Administration could describe as a "bilateral arrangement", Hong Kong might be making it possible for the Administration eventually to impose quotas. All these consideratione seem to reinforce the case against their giving of any indications on the part of Hong Kong of readiness to contemplate voluntary export restraints. It is true that the United States delegation may refer, as they did in London, to the existence of Hong Kong's arrangements with Scandinavia, Canada and Germany, and that Hong Kong can clearly not deny to the United States the right to similar treatment in the same circumstances. In this event it would surely be sufficient for Hong Kong to point to the bench-mark" which she has established in these precedents, and point out the distance separating them from the general United States position.

6. A draft telegram to Hong Kong is attached, giving the out- line of the advice which we might offer on the foregoing basis.

7.

U.K. Participation

If the advice which we are offering is on the foregoing

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