TNAG-0301-FCO40-337-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 176

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Mr. Heath Vey, Set f. Monson

M' Gallagher.

Mir Wilford

Sir L Mason

CONFIDENTIAL

UK TEXTILE POLICY HONG KONG

3

The Governor of Hong Kong has asked for consultations in London in late January or early February on the imposition of the tariff on cotton textiles imported into Britain with effect from 1 January 1972. He proposes an agenda as follows:

a. The probable effects on Hong Kong of implementation from

1 January 1972 of the policy regarding imports of Common- wealth cotton textiles which was announced by the then President of the Board of Trade on 22 July 1969;

b. The further implications for Hong Kong of this policy in

the light of Britain's application to join the European Economic Community;

c. The case for reconsideration of the implementation of

this policy in view of the uncertainties surrounding trading conditions as a result of the EEC application. d. Other measures which might alleviate the adverse effects on Hong Kong trade which are anticipated.

2. Although it seems unlikely that anything Hong Kong could say will lead to a change of policy here, we must clearly agree to consultations.

3. The only point at issue at this stage is whether these consultations should be held under the Chairmanship of the FCO or whether they should, as in the past, be between representatives of Hong Kong and the experts formerly in the Board of Trade and the Ministry of Technology, and now in the Department of Trade and Industry. We have been in touch with the DTI and they would like to stick to the arrangements followed in the past. My only doubt is that, as you know, the Governor has frequently made the point that if Hong Kong are to be overruled they should be overruled by the Foreign and Commonwealth Secretary and not by Ministers (or officials) in other Departments. I therefore had it in mind that Mr Bottomley might take the Chair at the consul- tations, although the actual discussion would of course be between the experts in the DTI and the Hong Kong officials. We could play this in a variety of ways. For example, there could be preliminary discussions with the DTI followed by a session in the

FCO.

Alternatively I could write to Mr Cater, seeking his views on what the Hong Kong Government expected. In any event even if, as seems likely, UK officials are not disposed to accept the Hong Kong arguments, for a change in policy, I think that the issue will have to be submitted to a FCO Minister. The Hong Kong Government could then be told of this when it had been done.

4.

I would welcome an opportunity of discussing this at some convenient time.

CONFIDENTIAL