TNAG-0304-FCO40-340-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 156

IMMEDIATE

ESKBY 998881Z

CYPHER CAT/A

FM FCO 281758Z

CONFIDENTIAL

NEUTRAL

DESKBY 9900012

CONFIDENTIAL

(COMMODITIES)

TO IMMEDIATE GOVERNOR HONG KONG TELEGRAM NUMBER 916 OF 8 MY SECOND IPT: COTTON TEXTILES.

130 с

DECEMBER.

FOLLOWING IS TEXT OF CONFIDENTIAL LETTER TO BE SENT BY MR P W RIDLEY TO MR HADDON-CAVE.

DURING THE COURSE OF DISCUSSIONS ON 6 AND 7 DECEMBER ABOUT HMG'S DECISION TO RETAIN THE EXISTING QUOTAS ON COTTON TEXTILES FROM HONG KONG AND THE OTHER CURRENTLY RESTRICTED COUNTRIES, YOU PUT IT TO US THAT IF THE HONG KONG GOVERNMENT IS BEING ASKED TO ACCEPT THAT LANCASHIRE NOW FACES A NEW AND UNEXPECTED SITUATION, HMG MUST RECOGNISE THAT THE POLICY DECISION TO RETAIN QUOTAS AND PROCEED WITH THE INTRODUCTION OF THE NEW COMMONWEALTH TARIFF CREATES A NEW AND UNEXPECTED SITUATION FOR HONG KONG. IN THESE CIRCUMSTANCES WE AGREED THAT FURTHER TALKS SHOULD TAKE PLACE IN THE WEEK BEGINNING 10 JANUARY 1972., AND YOU INDICATED THAT YOU WOULD LIKE THESE TALKS TO CONSIDER, IN A SERIOUS AND MEANINGFUL WAY, HOW THE EFFECTS ON HONG KONG OF THIS NEW FOLICY COULD BE AMELIORATED.

2. TO THIS END, YOU SAID THAT YOU WOULD LIKE THE TALKS TO COVER THE FOLLOWING POSSIBILITIES:

A. MODIFICATIONS IN THE PRESENT UK/HONG KONG QUOTA ARRANGEMENTS, THAT IS TO SAY,

1. A ONCE- AND-FOR-ALL TRANSFER OF YARDAGE INTO GROUP 1V FROM GROUPS 11,111 AND V( PARTLY TO RECOGNISE THE CHANGING PATTERN OF THE TRADE, AND PARTLY AS COMPENSATION FOR THE REDUCED COMPETITIVENESS OF FABRICS);

CONFIDENTIAL

/11.