TNAG-0152-FCO40-188-Exports-of-cotton-textiles-to-Canada-1969 — Page 93

Mr. J. C. Morgan C. Morgan

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Мк.м.ния M.K.M. Wilfre Would ya tole the please?

you (Raxat read it)

In the absence of Sir Leslie Monson I

st ask you to accept

this minute from me: my Head of Department is on leave. The subject is of more immediate concern on the economic side and I am,

therefore, copying this to Mr. Whitehead and Mr. Gallagher. However, there is

significance.

2.

-

or there might speedily develop

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political

I will try to simplify a complex matter.

Hong Kong are preparing to negotiate with the Canadians on 18/19 August over the restraint of their exports to Canada of certain categories of manmade fibre (MMF) garments. They have already had preliminary discussions with the Canadians (in Ottawa 26/27 June) and there is no doubt that the Canadians expect that on 18/19 August they will reach an agreement of the sort which for political reasons because their industry is putting on pressure -

they very much want.

3. In taking matters to this point Hong Kong have, in our opinion

and more so in that of the Board of Trade, exceeded their rights.

So called voluntary restraints of MMF exports cause difficulty to

the Board of Trade. They are working towards complicated decisions

down

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of policy which may have considerable bearing on the future of

international trade in textiles and in the meantime it will embarrass

them if a dependent British territory enters into bilateral agreements of this sort unless certain conditions are met relating to the

extent to which the importing country can establish that its own

industry has been damaged. There is little unanimity in the Board

of Trade what are those conditions, although they have long been arguing about them. Hong Kong know this and they have suffered

or think they have from the inability of the Board of Trade to

give clear guidance. They may have an excuse for committing themselves, as they seem to have done to Canada, without consultation with ourselves, but we suspect not. However they certainly believe that, in some cases, voluntary restraint is in their interests.

This seems to be one such case and they have gone so far as not

only to give the Canadians to understand that they would, later this month, agree on a restrained level of exports of polyester/polynosic

shirts but also to advise their Trade that they will grant no more export licences in this category (until by agreement with Canada the level of trade is fixed).

14.

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