TNAG-0281-FCO40-317-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster-to-Hong-Ko-1970 — Page 87

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countries enter our market free of duty. The previous Government had, however,

announced that from the beginning of 1972, we should remove all quantitative

restrictions but apply a tariff roughly equivalent to the CET to imports from

Commonwealth countries. Our present UNCTAD offer entirely excludes cotton

We already apply a tariff against Commonwealth man-made fibre

Commonwealth wool textiles come into the United Kingdom free of duty

textiles.

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textiles.

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and there are no quantitative restrictions on them.

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21.

20.

In the field of non-cotton textiles, the Four Power-meeting in Geneva

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at the end of July did not produce any immediate solution and the threat of

quantitative restrictions being imposed by the United States on Asian suppliers

remains. The Hong Kong Government would prefer to meet this threat by negot-

i..

iating a voluntary restraint agreement with the United States. At this stage,

1.

it is not possible to foresee the outcome of the various lines of action which

Par may be pursued, including the possibility of a GATT study of the whole textile

problem. We shall continue to work for the reduction to a minimumn of new

restrictions on non-cotton textiles but, whatever form they take, it seems

highly probable that some such restrictions will be imposed or negotiated and

will thus limit the growth of Hong Kong exports to the United States. Other

developed countries, including the EEC will then have to consider whether in

such circumstances they will have to introduce restrictions. This problem,

however, does not directly arise from our entry negotiations. At present we

and the Six are taking a common line in trying to restrain protectionist moves

by the United States.

22. In any discussions with the Six about Hong Kong in the near future, it

seems desirable not to. attempt to reach firm conclusions about the future.

treatment of cotton textiles on the grounds that this may turn out to be part

of a wider international problem which extends to all textiles, and that future

developments cannot be sufficiently clearly foreseen at this stage to make it

possible to reach agreement on the treatment of Hong Kong cotton textiles in

isolation. At some stage, however, we shall have to discuss with the Community

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