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MR STEWART (Mintech:)
c.c. Kr Goldsmith(For information)
Mr Toms (CRE:2)
Miss Elliott (CRE:1) Mr Woodhead
**
Mir Britten (Fco)✓
HONG KONG COTTON TEXTILES
Brussels telegram No.22 asks for instructions about the reply to be given to Ernst, who has enquired from the Delegation about HMG's reactions to the ideas discussed with the Hong Kong representatives on 26 January.
2. There is evidently no great hurry about a reply, and I under- stand that the FCO feel that the Governor's reactions can be awaited. We may, however, at least begin to form our own views.
3. Ernst's motives in bringing us into the picture are not very clear. He may be hoping to probe the extent to which we are pro- pared to stand by Hong Kong in general, and not only over cotton textiles: he may also be seeking to probe how we expect our own textile policy to work out. Presumably we would not wish to allow ourselves to be drawn in this way. Nor would we wish, unless perhaps this were specifically requested by Hong Kong, to become involved in detailed discussions between Hong Kong and other parties on cotton textiles. At the same time it looks as if some response to Ernst is called for at least to avoid giving the impression that we are washing our hands of Hong Kong.
4. In the light of the foregoing I suggest that the line which our Delegation might take with Ernst could be as follows:
The Cotton Textiles Committee have agreed to take a decision on the prolongation of the L.T.A. only after the importing coun- tries have indicated in bilateral discussions the improvements they are prepared to offer. While we for our part look forward to the phasing out rather than the prolongation of the L.T.A., its improvement by way of progressive liberalisation might approximate to phasing it out, and we are therefore interested to sce substantial improvements offered by importing countries. We have moreover a particular concern for Hong Kong. We therefore look forward to hearing of the improvements which the EEC are prepared to offer to Hong Kong, although, Hong Kong being a sep- arate signatory of the L.T.A., we would expect details of improved arrangements to be worked out between Hong Kong and the EEC.
DI DUNNETT CRE:1
3 February 1970
Regalimy
·Please copy quickly to
Por. Itule (Commus ditius depr) ava Myr. Stewnet (HKD)
(HKD) who
more linctly concerned with the LTA than we are.
J.MYK H-
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