TNAG-0145-FCO40-181-Exports-of-textiles-to-United-States-of-America-1969 — Page 168

Telephone: 222 7877 Extension: 2460

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BOARD OF TRADE,

1 VICTORIA STREET,

LONDON S.W.1

13th May, 1969

Dear George

We had some words about the question what Hong Kong should say if challenged by the Americans about her arrangements with Canada, Sweden and Germany.

2.

The general line on which we are already agreed is that we have to concede that, if the Americans can produce figures sub- stantiating that in certain cases their industry is suffering from the kind of situation which underlay the agreement of Hong Kong to apply voluntary restraint to certain exports to Canada, Germany and Scandinavia, Hong Kong and the U.K. authorities would naturally be prepared to examine the American case. We should stress, however, that there are a great many factors to be taken into consideration. A sharply rising trend of imports for example would not by itself be nearly sufficient evidence: one would have to go into all the other factors that might enter into a judgment of "serious injury" to domestic producers, and all kinds of social economic, and even perhaps political considerations could be taken account of. The general object would be to avoid saying anything which the Americans could construe as an agreement even in principle to be ready to apply voluntary restraints to Hong Kong's exports to the United States.

3. You may also find it helpful to have in mind the following points:

(i) The position between Hong Kong and Canada as we understand it is that Hong Kong has told the Canadian Government that it has decided to restrict exports of three items (polyester/ cotton shirts, slacks and blouses) to Canada, but that the decision will be reviewed immediately if

(a) any other country claims that this is a precedent, and

(b) if as a result of the control trade is diverted to a third country.

(ii) In the case of Sweden there is no commitment to extend the controls which apply only to certain kinds of Anoraks and certain kinds of sweaters beyond 30th June next. For our part we see no harm in saying this to the Americans, but we under- stand that you have some doubts about it.

G.S. Whitehead, Esq.,

The Foreign & Commonwealth Office,

Gt. George Street,

S.W.1.

RECEIVED IN REGISTRY No.51

28 MAY 1969

HIK 6/504/1

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