TNAG-0144-FCO40-180-Exports-of-textiles-to-United-States-of-America-1969 — Page 79

Kil

100

Reference

(124)

Mr. Stans' visit to Hong Kong

The draft submission attached to your minute of 29th April needs to be looked at again in the light of Hong Kong telegram No. 339, since it would appear that Hong Kong has already taken action - in my view quite deliberately which will make it clear to the Americans that Hong Kong's position on man-made fibres is quite different from that of the United Kingdom. Indeed, the general tone of the telegram and the willingness of the Hong Kong officials to discuss the figures in detail strongly suggests that De Geer was given to understand that Hong Kong would see to it that his demands were satisfied at the June meeting. Why otherwise would so robust an individual depart so meekly for Bangkok? Our worst fcars seem to have been realised.

2.

In my view it is necessary for us to take strong action in order to recover the ground which has been lost before Er. Stans visits Hong Kong, for he will certainly be very well briefed by the Swedes. This will need to be considered with the submission. The statement attributed to Baron de Geer in paragraph 5 of the telegram, which Mr. Goldsmith knows is wholly false, is typical of what we in this Division have learnt to expect of him, but as I understand the position his double-dealing has released us from the obligation to continue the existing restraints for another year.

to:-

a)

b)

3.

If so, I would hope that we could secure agreements

instruct Hong Kong:-

1) not to implement the new cotton restraints in the

absence of agreement with the Swedes

ii) submit all the available cotton figures to London

to make sure that they are consistent with the L.T.A.

iii) not to withhold E/A's on any items not subject to

restraint;

inform the Swedes:-

1) of the action we have taken vis-a-vis Hong Kong

ii) that as matters stand we do not intend to allow the existing restrictions on the non-cotton items to be extended beyond June

iii)

iv)

that any further discussions with Hong Kong must take place in London

that we reserve the right to take appropriate steps if the Swedes act to restrict imports from Hong Kong without recourse to the procedures established under the G.A.T.T.

Miss Welch is preparing a note on the position, but you should note:-

1)

ii)

that Hong Kong has accepted the principle that Annex B of the L.T.A. should apply in the case of the non-cotton items;

that in spite of this the base period was pushed back in some cases to August of last year;

/iii)