TNAG-0244-FCO40-280-Exports-of-textiles-from-Hong-Kong-to-USA-1970 — Page 227

CYPHER/CAT A.

ROUTINE WASHINGTON

TELEGRAM NO 39

CONFIDENTIAL.

NEUTRAL.

CONFIDENTIAL

ра

Meur 9/1

TO FOREIGN AND COMMONWEALTH OFFICE

7 JANUARY 1970.,

Rey Bent 1/1/20

Re capes toisellar, 4.K. for office.

Then US File,

Fone-office

ADDSD TO FCO TELNO 39 OF 7 JANUARY REPTD FOR INFMN UKMIS GENEVA

HONG KONG TOKYO,

(FCO AND GENEVA PLEASE COPY TO HONG KONG GOVERNMENT OFFICER)

U.S. JAPAN TEXTILE NEGOTIATIONS.

IN CASE TOKYO HAVE NOT YET OBTAINED THE TEXT WE ARE SENDING

BY BAG COPIES OF A NEW DRAFT EXPORT RESTRAINT AGREEMENT WHICH WAS

HANDED TO THE JAPANESE FOREIGN OFFICE BY THE U.S. EMBASSY ON 2 JANUARY.

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2. DRAFT, WHOSE PROPOSED DURATION IS FIVE YEARS STARTING ON 1 JANUARY, WOULD IMPOSE SPECIFIC LIMITS, BASED ON MID-1968 TO MID-1969 PERFORMANCE, ON 9 WOOL AND 19 MAN-MADE CATEGORIES - COVERING SOMETHING LIKE THREE QUARTERS OF THE TRADE. LIMITS

WOULD GROW OR DIMINISH ANNUALLY IN PROPORTION TO CHANGES IN TOTAL AMERICAN MARKET. ALL CATEGORIES NOMINALLY UNLIMITED WOULD BE

STOPPED AT FIXED TRIGGER-POINTS SUBJECT TO ''CONSULTATIONS'' IF

THE JAPANESE REQUESTED THEM. TRIGGER-POINTS WOULD BE THE GREATER OF EITHER 1968 PERFORMANCE OR 100,000 SQUARE YARDS FOR ALL WOOL CATEGORIES, 350,000 MAN-MADE APPAREL, 509,900 MAN-MADE NON-APPAREL. DRAFT INCLUDES CARRYOVER OF UP TO 5 PERCENT BUT NOT SWING.

3. IT IS INTERESTING THAT, AT LEAST DURING JANUARY-OCTOBER 1969, JAPAN WAS NOT THE PRINCIPAL SUPPLIER IN AT LEAST SEVEN CATEGORIES TO BE SPECIFICALLY LIMITED. (KOREA 4, TAIWAN 2, HONG KONG 1.) 4. ACCORDING TO REPRESENTATIVE HERE OF JAPANESE INDUSTRY WHOSE INFORMATION IS USUALLY RELIABLE (SOURCE TO BE PROTECTED) JAPANESE PRIME MINISTER HAS NOW GIVEN FOREIGN MINISTER AND MINISTER OF

INTERNATIONAL TRADE AND INDUSTRY JOINTLY A FREE HAND TO SETTLE

TEXTILE. QUESTION. THEY ARE SAID TO HAVE DECIDED WITH CABINET

APPROVAL TO INFORM THE U.S. EMBASSY THAT THE LATEST PROPOSAL IS

TOTALLY UNACCEPTABLE: THAT JAPAN CANNOT UNDERSTAND THE CONTINUED

IGNORING BY THE U.S. OF THE FUNDAMENTAL JAPANESE REQUIREMENTS FOR NEGOTIATION ( MULTILATERAL DISCUSSION, EVIDENCE OF INJURY AND SLECTIVITY ): AND THAT THERE SEEMS AT THE MOMENT TO BE NO BASIS FOR NEGOTIATION AT ALL.

FCO PASS UKMISSION GENEVA HONG KONG AND TOKYO. MR. FREEMAN.

[REPEATED AS REQUESTED],

COPY TO:

INTERNATIONAL TRADE DISTRIBUTION:

COMODITIES DEPT

ICAN DEPT

H.K. DÆFT

RECLIVED IN REGISTRY No.51

-9 JAN 1970

HKK6/04/1

H.K. GOVERNMENT OFFICE 54 PALL MALL, S.W.1.

La La La La La

CONFIDENTIAL