CONFIDENTIAL
STOCKHOLM TEL NO.9 TO HONG KONG
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7. THE AD REFERENDUM AGREEMENT IS SET OUT IN A MEMORANDUM OF UNDERSTANDING AND AN EA LETTER WHICH I HAVE INITIALLED WITH DE GEER.
8. THE SWEDES HAVE PROVISIONALLY DECIDED AGAINST SWING, BUT DE GEER TOOK NOTE OF OUR ARGUMENTS, WHICH STRESSED THAT THERE WERE MUTUAL ADVANTAGES ARISING FROM THIS INCREASED FLEXIBILITY, DE GEER WOULD PURSUE THIS WITH THEIR INDUSTRY AND WITHIN THE GOVERNMENT AND WOULD CONTACT US LATER WITH THEIR PROPOSALS, IF ANY.
*
9. ALTHOUGH DE GEER THREATENED (OR QUOTE OFFERRED UNQUOTE) IMPORT RESTRICTIONS SEVERAL TIMES DURING THESE TALKS HE DID NOT (NOT) REPEAT HIS ARGUMENTS ON DEFENCE AND DISRUPTIVE LOW COST/ DYNAMIC HIGH COST COMPETITION. FURTHERMORE, WITH THE DROPPING OF RESTRAINTS FROM KNITTED NIGHT GARMENTS, WOMEN'S COTTON UNDERWEAR, SLACKS AND TOWELS (COUPLED WITH THE NARROWING OF THE REMAINGING UNDERGARMENT RESTRAINTS TO UNDERPANTS), HONG KONG WILL NO LONGER BE UNDER RESTRAINT ON ANY ITEM WHERE A DEVELOPED WESTERN COUNTRY IS THE PRINCIPAL SUPPLIER. (THE TWO EXCEPTIONS TO THIS BY REFERENCE TO THE 1969 FIGURES ARE KNITTED SYNTHETIC FIBRE SHIRTS AND MEN'S AND BOY'S MMF UNDERWEAR, BUT HERE THE VERY SHARP RISE OF HONG KONG EXPORTS IN EARLY 1976 WILL HAVE PUT US INTO THE LEADING POSITION).
16. NOTWITHSTANDING THE BENCHMARKS SET OUT IN PARA 4 ABOVE, THE CRITERIA FOR THE SWEDISH DEMAND FOR RESTRAINTS ON WOVEN SYNTHETIC FIBRE SHIRTS, BLOUSES AND NIGHT GARMENTS REMAIN UNSOUND IN PRINCIPLE. IN ADDITION, THIS APPEARED TO BE THE SOLE ITEM CAUSING DIFFICULTY BY REFERENCE TO PARA 4 OF FCO TELEGRAM 347 TO YOU. ACCORDINGLY I CONCLUDED WITH A FORMAL DISAGREEMENT WITH THEIR CASE FOR RESTRAINT HERE, BUT ADDING THAT WE HAD GONE ALONG WITH THIS REQUEST PENDING THE FINDINGS OF THEIR ROYAL COMMISSION
ON TEXTILES.
11. MCENERY, WHO CONCURS IN THIS REPORT, SUPPORTED MY STATEMENT,
12. I SHALL BE ARRIVING BY BA 918 ON 4 JUNE: SOUZA WILL BE ARRIVING BY QF762 ON 8 JUNE.
(65)
FCO PASS TO ALL.
· SIR A ROSS
[REPEATED
AS REQUESTED
INTERNATIONAL TRADE DISTRIBUTION:
COMMODITIES DEPT
W.E.D.
ADDITIONAL DISTRIBUTION: HONG KONG INT TRADE
CONFIDENTIAL
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