TNAG-0246-FCO40-282-Imports-of-textiles-from-Hong-Kong-to-UK-1970 — Page 43

(61) on Part C

ising.

(Flag M)

Flags N

and O

Argument

11. The growth issue has fortunately become an academic issue

in a sense. Hong Kong's export performance in 1969 in the

sheeting categories did not entitle them to more than 1%

growth in the current year under the provisions of the Heads

of Agreement (which will expire at the end of this year). But

I think we must pursue this matter. Hong Kong feels strongly

that as a matter of principle the provisions of the Heads of

Agreement must be held to apply in the absence of any agreed

variation for this category of cotton exports during the neg-

otiations. This is an issue on which they are deserving of

support from us for the reasons set out in the attached note.

There are grounds for hope that, with the departure of Mr

Stewart and the severance of the Industries Division from the

Board of Trade, a more compromising spirit may be evident at

this end. We could have an ally in the Board of Trade; in

this connection you should see a recent exchange of minutes

between Mr Stewart (paragraph 3) and Mr Goldsmith (paragraph 6).

12. We need to consider how we should pursue it. So far as

we know, the Board of Trade remain responsible for the negot-

iation and administration of trade agreements with overseas

countries. It is of course unthinkable that they should

reach any new conclusions about this particular agreement

without consulting the Ministry of Technology. But it does

mean that any further approach ought to be made to Mr Goldsmith

and not to Mr Carey. The first step might be a meeting with

Mr Goldsmith at which the note attached might be used as a

/basis