TNAG-0153-FCO40-189-Exports-of-cotton-textiles-to-Canada-1969 — Page 114

CONFIDENTIAL

HONG KONG TELNO 660 TO FCO

-3-

1. IN THE FIRST PLACE, I FEEL THAT WHILE RECOGNISING THAT THIS IS NOT

THE RESPONSIBILITY OF THE HONG KONG GOVERNMENT, THE CANADIAN

DELEGATION HAS BEEN PLACED IN A VERY DIFFICULT POSITION. IT IS

QUESTIONABLE WHETHER WE WOULD HAVE COME TO HONG KONG HAD WE KNOWN

IN ADVANCE THE POSITION OF THE U.K. GOVERNMENT.

J

2. SECONDLY, SINCE APPARENTLY LEVELS ON NON-COTTON ITEMS ARE TO BE

SUBJECT TO REVIEW BY THE U.K. GOVERNMENT, THE PROPOSALS WHICH I PUT

FORWARD YESTERDAY AS THE LEVELS FOR NON-COTTON ITEMS ARE HEREBY

WITHDRAWN IN A FORMAL SENSE. IF WE CONTINUE TO DISCUSS APPROPRIATE

LEVELS, AS I AM PREPARED TO DO, IT MUST BE ON THE UNDERSTANDING

THAT THE CANADIAN GOVERNMENT HAS THE RIGHT TO REPUDIATE, WITHDRAW OR

MODIFY ANY PROPOSALS I MAKE OR ANY AGREEMENT WHICH I MIGHT INDICATE.

3. THIRDLY, SINCE OUR POSITION IS BASED ON A PACKAGE CONCEPT AND SINCE THE HONG KONG GOVERNMENT DOES NOT HAVE THE AUTHORITY TO

NEGOTIATE ON A PART OF THE RANGE OF PRODUCTS CONCERNED, IT APPEARS

TO US THAT IN A FORMAL SENSE WE ARE ENTITLED TO WITHDRAW THE

PROPOSALS WE MADE ON COTTON ITEMS. AFTER CAREFUL CONSIDERATION WE

HAVE DECIDED NOT TO WITHDRAW THE PROPOSALS ON COTTON ITEMS THAT WE

HAVE PUT FORWARD. ON THE OTHER HAND, IF WE PROCEED TO FURTHER

DISCUSSION OF APPROPRIATE LEVELS, ETC., ON COTTON GOODS, IT MUST BE

CLEARLY UNDERSTOOD THAT ANY TENTATIVE AGREEMENT ON LEVELS OR

CONDITIONS MORE FAVOURABLE TO HONG KONG THAN OUR INITIAL PROPOSALS

WILL BE SUBJECT TO POSSIBLE REPUDIATION, WITHDRAWAL, OR MODIFIC-

ATION BY THE CANADIAN GOVERNMENT TO THE EXTENT THAT THEY ARE MORE

FAVOURABLE THAN OUR INITIAL PROPOSAL.

SINCE WE ARE HERE, WE ARE PREPARED TO CONTINUE DISCUSSIONS EVEN ON

THIS HIGHLY TENTATIVE BASIS. HOWEVER, IT IS APPARENT THAT WE WILL NOT

BE ABLE TO REACH FINAL SETTLEMENT AS EARLY AS YOU AND WE HAD HOPED.

CONFIDENTIAL

/IT SEEMS