liberal towards Japanese imports than other countries, but the Americans do overlook the very large imports we have taken from developing countries in the Commonwealth and particularly from the sophisticated, competitive industries in Hong Kong. Going some way to meet the American textile lobby involves grave risks, especially in a year when the Generalised Preferences Scheme will be brought into operation including, we hope, by the United States herself, and at a time when the United Kingdom is moving away from quota restrictions on cotton textiles and imposing a tariff. Nevertheless, both we and Hong Kong believe that the best course is for Hong Kong to be ready to conclude a bilateral agreement on textiles with
the USA.
Points we shall have in mind in any Hong Kong/US agreement
7. We do not want to get into negotiations now, but the broad considerations already referred to and Hong Kong's own interests imply that Hong Kong must keep the level of trade that she has attained and further growth provided for. Any agreement would have to be reasonably flexible and the amount of categorisation realistically related to those sectors of the US textilc industry which are suffering injury. Any agreement would need to be tailored to the realities of Hong Kong/USA. trade and an attempt to seek a common form of agreement between the U.S. and all Asian suppliers will increase the problems. The Attitude of the Japanese to a Hong Kong/U.S. bilateral will be important but Confidential: the Secretary of State should not reveal that he knows that this has already been discussed between the Governor and Ambassador Kennedy at and that the latter has said that the Japanese would welcome the negotiations_7.
Talking Points
8. 1. We naturally have some account of Ambassador
Kennedy's talks in Hong Kong, but could he give some account of his talks in Japan, Taiwan and Korea?
2. There is a good deal of genuine doubt in the world
/about
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