imports from Hong Kong of wide sheeting and sheets.
Hong Kong was therefore asked to impose restrictions on
the export of these categories and in discussions held
in Hong Kong in September 1968 agreement to restrain
exports at certain reduced levels was reached. However.
no agreement was reached on the percentage growth factor
to apply in succeeding years to the previous year's
export level. The negotiations were somewhat acrimon-
ious, Hong Kong being particularly aggrieved because
they thought that HMG was acting in disregard of the
Heads of Agreement.
Immediately the meetings were over the Board of
Trade representative, who had negotiated for HMG, left
Hong Kong to negotiate a similar restraint agreement
with India. It is admitted by the Board of Trade that
he had not referred to the question of growth during
the discussions. But he did leave a message on his
departure with a representative of this Office, who
had also attended the talks, "offering" Hong Kong an
annual growth rate of 3%. The Heads of Agreement
stipulate a different rate of growth which can, in
circumstances which Hong Kong consider apply here, be
6%.
The Board of Trade argue that because Hong Kong
then telegraphed their representative in Delhi to the
effect that the package was accepted they also accepted
the offered growth rate of 3%. Hong Kong deny this.
They argue that the package was that agreed in dis-
cussions with the Board of Trade representative, which
they only accepted because it was a considerable cut-
back on their previous level of trade - on the basis
that the higher growth provisions in the Heads of
Agreement continued to apply.
/ Hong
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