TNAG-0246-FCO40-282-Imports-of-textiles-from-Hong-Kong-to-UK-1970 — Page 39

Mr Laird

Mr Wilford

Hong Kong/U.K. Wide Sheeting and Sheets Agreement, 1968

Problem

The Industries Division

Revised arrangements for the restriction of imports from

Hong Kong of cotton sheets and wide sheeting were negotiated

in September, 1968. It has not been possible to reach agree-

ment with Hong Kong on one aspect of these negotiations,

namely the growth arrangements.

(formerly of the Board of Trade, now of the Ministry of Tech-

nology) maintain that Hong Kong agreed to a limited growth

provision of 3% per annum as part of the revised arrangements.

The Hong Kong Government deny this and maintain that, in the

absence of any substantive discussion or agreement about

growth during the negotiations, the general growth provisions

in the main agreement governing Hong Kong's exports of cotton

textiles to the U.K. (the "Heads of Agreement") are applicable;

these provide for a potential growth rate of 6%.

Recommendation

2. I recommend that we should support the Hong Kong Govern-

ment in this matter, if necessary taking it to ministerial

level. But as a preliminary step I suggest an exploratory

discussion with Mr Goldsmith (Board of Trade) on the basis of

the arguments set out in the attached Note, which would be

designed to elicit Board of Trade support at official level.

13.

10