TNAG-0301-FCO40-337-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 33

PRIORITY

CYPHER CAT A

FM F C O 271645 Z

LAST

REF.

RESTRICTED

REF.

RESTRICTED

(HKK 6/548/3)

NEUTRAL

TO PRIORITY GOVERNOR HONG KONG TELNO 408 OF 27 MAY.

ANGLO/INDIAN TRADE AGREEMENT OF 1939.

1. AS HAS ALREADY BEEN ANNOUNCED, WITH EFFECT FROM 1 JANUARY 1972 THE PRESENT PROTECTION OF THE BRITISH COTTON TEXTILE INDUSTRY BY

QUOTA CONTROL WILL BE REPLACED BY A TARIFF ON IMPORTS FROM THE

COMMONWEALTH PREFERENCE AREA.

2. THE PROPOSED TARIFF IS IN CONFLICT WITH THE ABOVE-MENTIONED

AGREEMENT. IN DECEMBER 1970 WE ASKED THE INDIAN GOVERNMENT TO GRANT

1S A WAIVER FROM OUR OBLIGATIONS TO ENABLE US TO IMPLEMENT THIS

POLICY, THE INDIANS HAVE STILL NOT AGREED TO DO THIS. IF THEY DO

NOT DO SO BRITAIN WILL BE FACED WITH NEED TO TERMINATE THE AGREE-

MENT. THIS AGREEMENT (COPY FOLLOWS BY BAG) IMPOSES OBLIGATIONS

ON THE UNITED KINGDOM AND ON INDIA AS REGARDS THE DEPENDENT

TERRITORIES WHICH UNDER ARTICLE 8 ARE OBLIGED TO ACCORD INDIA ANY

PREFERENCES WHICH MAY FOR THE TIME BEING BE ACCORDED TO QUOTE

ANY OTHER PART OF THE BRITISH EMPIRE UNQUOTE. UNDER ARTICLE 11

INDIA UNDERTAKES TO ACCORD TO DEPENDENT TERRITORIES GOODS

PREFERENCES, IN SOME CASES 10 PER CENT ON SPECIFIED GOODS, AND

UNDER ARTICLE 12 TO GIVE TREATMENT TO ANY GOODS NOT LESS FAVOURABLE

HAN ON THOSE OF ANY FOREIGN COUNTRY.

3. AS IT IS NECESSARY FOR BRITAIN TO GIVE 6 MONTHS' NOTICE OF

TERMINATION (IF THIS PROVES ENVENTUALLY TO BE NECESSARY) WE

SHOULD BE GRATEFUL TO KNOW, BY 19 JUNE AT THE LATEST, WHETHER TERMINATION, WHICH WOULD BE EFFECTIVE IN RESPECT OF THE DEPENDENT

TERRITORIES AND ASSOCIATED STATES, WOULD LEAD TO ANY SPECIAL

DIFFICULTIES FOR HONG KONG.

DOUGLAS-HOME

INTERNATIONAL TRADE DISTRIBUTION

COMMODITIES D

HKQ

NNNNN

RESTRICTED

5

RECIVED IN REGISTRY No. 51

- Jon 1971

AKR6/540/3

1