quotas will be followed by a flood of low-price imports in quantities likely to produce a situation of market disruption
Eventuak. and the reimposition of quota restrictions in addition to the
L
tariff.
Consultation with Hong Kong
4. In April, immediately the Report of the Textile Council was published, we sent some guidance to Hong Kong on the status of the Report and HMG's attitude towards it. Indeed, because we gave no guidance to Commonwealth Governments but only to our own posts in Commonwealth countries, Hong Kong is to that extent better informed than, say, India or Pakistan. In that guidance we said that there was "no question of our approaching other Commonwealth Governments to discuss the proposal for a tariff unless and until a decision had been taken to follow up the Textile Council's recommendation". Hong Kong may be forgiven for reading into these words something like an assurance that Ministers would be taking Commonwealth Governments' comments into account before reaching a decision. But this is not what the President is recommending; he is asking for a decision first and consultations thereafter with those Commonwealth Governments with whom we need to negotiate waivers of their contractual preference rights.
5. The Governor has in fact had rather more than an inkling Mr. Dan Jones, that a decision on this question is imminent. M.P. (PPS to the President of the Board of Trade) has hinted strongly to the Hong Kong Association that if it was intending to make representations about the recommendation it should make them as soon as possible and in any event before the summer recess. We also know that an official of the Hong Kong Government heard from a Board of Trade official at Geneva that a paper had gone forward to Ministers with a recommendation in favour of the adoption of the tariff. Against this background we had no alternative but to advise the Governor last week that this question was indeed under ministerial consideration with the possibility that a decision might be reached before 25 July.
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