TNAG-0164-FCO40-200-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 94

(HKK 6/531/1)

Hong Kong Department

113

2 May, 1969.

There is less need than usual with Hong Kong commercial negotiation telegrams to reply in haste to their telegram No. 339 about the Swedish textile negotiations. Nevertheless you will agree that we should reply before too long, with Mr. Stans' visit to Hong Kong in the offing, and with Hong Kong's proposal before us that about 20 May Stockholm should inform the Swedes that Hong Kong would be prepared to meet their non-cotton requests at the levels set out in paragraph 10 of the telegram. I should therefore be grateful to know the Board of Trade views before too long.

I have had a preliminary discussion on this telegram with Howard Collings of our Commodities Department to whom I am copying this letter. We did not attempt to assess the strength of the Swedish case in the various non-cotton cate- gories but confined ourselves to considering those aspects of the Hong Kong proposals which we thought might have a general bearing on the handling of discussions when Kr. Stans reaches Hong Kong on 17 May.

I do not know how much Hong Kong trade has been affected by the sudden suspension by the Swedes of export authorisations in three non-cotton items listed in Hong Kong telegram No. 308. There may well be a good reservoir of authorisations on which the trade can draw for the time being. But it is no doubt because this suspension is affecting, or shortly will affect, their trade that Hong Kong propose to come to terms with the Swedes so soon after Mr. Stans' visit as 20 May. Howard Collings and I wondered whether it would be possible to meet Hong Kong's wish to do a deal at this unfortunately early date or whether we should have to hold them to further negotiations in June in Stockholm when, as I have recently told you in another letter, they are so unfortunately short of staff. rather thought the latter.

We

When guidance is given to Hong Kong for the forthcoming Stans' discussions I think we shall now need to tell them to draw a firm, if rather artificial, line between the actual negotiations with the Swedes which came to an end, if I may so put it, in paragraph 8 of their telegram 339 and the exploratory discussions into which they entered on a hypo- thetical basis from paragraph 8 onwards. I do not know how convincing we shall be able to be in seeking to draw this distinction; but perhaps we ought to try.

Miss J. E. Elliott,

CRE Division,

Board of Trade,

1 Victoria Street,

London, S.W. 1.

(H. H. Stewart)