TNAG-0168-FCO40-204-Exports-of-textiles-to-United-Kingdom-1969 — Page 113

3.

(e)

"this offer was communicated to the leader of your Delegation, who, I understand, accepted it as part of the package" : I did not;

I took then the line taken subsequently in paragraph 21 of the Governor's despatch;

W

Plag 'F

(£) "we had not previously allowed any growth for Portugal, nor did we subsequently allow any for India, so that in the circumstances there can be no question of our allowing any growth above 3 per cent for Hong Kong" : surely Portugal and India must have agreed the restraint was not unilaterally imposed? We do not know what led the Portuguese and Indians to agree but to us their reasons for doing so are irrelevant as is the fact that they conceded 'no growth'; our Heads of Agreement UK/HK already cover the point and cannot be modified unilaterally just because Portugal and India, operating from the basis of their own bilateral agreements or whatever, did so.

It looks to me as though Shaun Stewart did not disclose to his colleagues in the B.0.T. the actual circumstances of his "offer" of 3 per cent growth. We could hardly say in the despatch "The B.O.T. representative forgot to mention growth during the actual consultations but pushed a note about it under Mr. Carter's hotel room door before he left" so in paragraph 20 of the despatch we rather glossed over how BLAG'F' the proposal reached us. But we really can't see that we should now pay for Shaun's mistake.

The major point is that anyway he would not have been offering 3 per cent growth. He would have been seeking our agreement to a limitation of growth below the 1 per cent plus 5 per cent provided for in the Heads of Agreement. If he had raised it in the consultations we should have had to clarify exactly which of the categories the re- duction should be applied to. We should also have had to clarify whether it would apply after the 1 per cent growth provided for in Head C of the Heads of Agreement had been added or whether it was to be 3 per cent net. That is to say, we should have had to clarify whether Stewart was seeking modification only of Head E, paragraph 5, or of Head C as well.

And of course, if he had brought this aspect up after we had reached agreement on the terms of the 'package' I should have felt entitled to and should have said that if Hong Kong's export oppor- tunities for 1970 were to be thus curtailed I should have to recon- sider the limits proposed for 1969. In other words, if he had tried to add an additional limitation to the package, we should have been entitled to re-open the package itself.

On

The quantities we are talking about are not negligible. the assumption that by 'the new categories' they mean the re-defined category 7 (loomstate sheeting and shirting (including yarn-dyed) 60′′ and over) and the new category 12A (finished sheeting, shirting, wincey- ettes, flannelettes, other raised, brushed or sueded fabrics other than printed, 60" and over) 3 per cent would be 525,000 square yards, and the difference between that and our current entitlement of 6 per cent total growth would of course be another 525,000 square yeards. Three per cent of the new sub-limit for sheets would be another 30,000 yards.

COMETYE

We did not/