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PRIORITY UK HI SION GEVA TO FORIGN AND COMHOIREALM OFFICE
PRIORITY UK MISSION GENEVA TET. NO. 30 20 HONG KONG 8 JULY 1970
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ADDSD TO HONG KONG TELNO. 30 OF 8 JULY REPTD FOR INFMN TO FCO,
UKDEL EC, BRUSSELS (FOR DODGE), BONN.
YOUR TELEGRAM TO FCO NO. 448 COTTON TEXTILES: HONG KONG/ EEC
FROM JONES
R
67
RIEVED IN
REGISTRY No. 5:
HKIL 6/6.
HAVING JUST READ ALL BACK PAPERS ON THIS SINCE APRIL I HOPE YOU WILL NOT MIND ME INTERVENING. I FEAR WE MAY BE NEG- LECTING THE ESSENTIAL FOR THE INESSENTIAL, NOT RECOGNISING THE REALITIES OF A NEGOTIATION WITH THE COMMUNITY AS WHOLE
AS DISTINCT FROM INDIVIDUAL MEMBER STATES AND SEEKING TO PLAY
THE CARD OF HMG'S INTERVENTION AT TOO EARLY A STAGE.
2.
FRANKLY, I DON'T THINK OBTAINING DETAILED FIGURES OF PRODUCTION AND CONSUMPTION WILL HELP HONG KONG AT ALL IN THIS SITUATION BECAUSE IT WILL NOT BE POSSIBLE TO CONDUCT HAGGLING OF THIS SORT ON ''CASES'' WITH FORTY OR FIFTY PEOPLE IN THE ROOM. NOR DO I THINK WE WILL GET VERY FAR ON COVERAGE BECAUSE THE FRENCH AND BENELUX WILL NOT GIVE WAY AND THERE WILL
BE ONE COMMUNITY LINE.
3.
THE JUSTIFICATION FOR AN ARTICLE 4 IS THAT THE DEAL IS BROADLY ACCEPTABLE IN TERMS OF LEVELS AND FLEXIBILITY, AS WITH THE US IN 1966, AND/OR THAT THE ALTERNATIVES WILL BE WORSE. IN THIS RESPECT I THINK WE SHOULD CONCENTRATE ON (A) BASE LEVEL (B) GROWTH (C) FLEXIBILITY PROVISIONS AND (D) EQUITY.
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4. ON (A) AND (B) ERNST'S FIGURE OF 12,780 TONS IS EXACTLY THE SAME AS HE PUT FORWARD IN MARCH, E.G. 1969 ACTUAL HONG KONG EXPORTS PLUS GROWTH OF 3% AVERAGED OVER THREE YEARS. DORWARD
AND I THEN COUNTERED WITH A BASE LEVEL OF 1979 QUOTAS PLUS 1969 LIBERALISED TRADE PLUS GROWTH WITH GROWTH FROM THAT LEVEL OF AT LEAST 5% OR GROWTH FIGURE CONCEDED TO JAPANESE IF THAT WERE GREATER. THIS WOULD GIVE AN AVERAGE FIGURE OVER THREE YEARS
OF MORE LIKE 15,000 TONS.
15.
ON (C)
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