TNAG-0152-FCO40-188-Exports-of-cotton-textiles-to-Canada-1969 — Page 14

that

allowed under the quotas: Canada has not reached agreement

with Japan, her main supplier; that the interests

of the prairie wheat farmors in the Japanese market

my woll cutweigh tho interests of Quebec in protection: that the tariff on polycatex/cotton cloth is under review

by the Tariff Board, mainly because of the difficulties

c::periencel by the shirt producers; and that for a

mumber of roubong this would be a very awkward moment

for Canade vo impose a ponal duty on importo.

6. But at the ond of the day we must decide what is

in the best interests of Britain and liong Kong. It is

clear from para;7 of your telegram that you have been

misinformed about was was "established" at llughes'

mectingo in London. To have never decided no a

matter of pinciple to agree to voluntary restraint on

non-textile items in any circumstances, still less did

wo give authority to Hong Kong to reach any decisions

on so important a matter. You will recall that in

1967 the Americans made a formal approach to the

Canadians warning them of the possible consequence3

11 llong Kon; entered into a bilateral restraint agrec-

ment. Wo managed to avoid this hurle, The fact that to the extent that it has the position has het deteriorated/io almost certainly

a um latual due to our having agreed to restraint

now

at your

in 1967 and it behoves up to look at the

word

position rush more carefully this time. If Hong Kong were to insist on pushing further along this to the night find herself faced with tariffs and quelas on all her expôts to the U.K.