TNAG-0153-FCO40-189-Exports-of-cotton-textiles-to-Canada-1969 — Page 64

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Hong Kong : Textiles

Thank you for your helpful minute of 25th August.

I agree that the reasons I gave in my pare.10 for thinking that the Canadians might do nothing were not very cogent. However, I doubt whether you are right in suggesting that Canada might try to intimidate Japan by making an example of llong Kong. The Japanese are far too important a customer to Canada for that and the Canadians know it. There is a world surplus of wheat and Japan has just called for tenders! What the Canadians would do would depend on what Hong Kong did; and if I were Mr. Jordan I would fix a quota between now and the end of the year which would be rather higher than one quarter of the trade in the 12 months ending on 31st July, to draw back some of the trade which Hong Kong has lost to e.g. Taiwan and Korea. This amount could be shipped on the understanding that we would look at the question again if and when agreement had been reached with the Japanese. The Canadians would then be faced with the decision whether or not to take extreme action for the sake of a "few thousand dozen shirts". For our part we could make it clear that (1) we were prepared to tea up with the Japanese against Canada and (2) we had certain problems of our own about imports of cotton textiles from Canada.

If we played a hand like this on 22nd September we should be able to keep the Canadians pondering what to do for quite a time, unless they went to the G.A.T.T., which we in this Division would welcome.

3. I agree your minute of 20th August to Kommis that we could not speak "on behalf of Hong Kong" in the C.T.C. on the question of the cotton tariff. On the other hand for good or ill what we say on non-cotton textiles will cover the United Kingdom and Hong Kong unless we say otherwise.

MR. D.I. DUNNETT (CRE1)

c.c. Mr. Jupp (1.1),

G

付

S. STEWART,

Ind. 1 Div.,

26th August 1969.

:

Mr. Toms (CRE)

Miss Welch (1.1),

Mr. Hagestadt (CR2), Kiss Statham (CR4), Mr. Whitehead (FCO),

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