TNAG-0144-FCO40-180-Exports-of-textiles-to-United-States-of-America-1969 — Page 74

preferences aro laid bare, including 'both the qualifications mentioned, above; this might give to Er. Stans the impression, or enable him to put on the oltuation the interpretation, that Hong Kong was (not in the last resort opposcă the extension of the L.T.A.

8. Our advice to liong Kong should therefore include cone stiffening of Hong Kong's initial opposition to the exteme sion of the LAT.A.

9.

With regard to voluntary export restrainte it seems advisable to warn Hong Kong that a policy of attempting to buy off the United States with restraint arrangements on individual types of textiles is almost certainly likely to lead many other countries to demand similar restraints against Hong Kong. If such a development ensued Hong Kong will appreciate that the U.K. would be under heavy pressure from its industry to follow suit. It seems advisable to Warn Hong Kong of the position under United States legis- lation 1.0. that the U.S. Administration have authority to impose quotas only where there is a pro-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. This means that the United States Administration evidently fool themselves to be in a very weak negotiating position in suggesting voluntary export restraints, unless they have something 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 considerations seen to reinforce the case against their giving of any indica- tions 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

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