TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 12

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HKK6/548/3/19

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RÉCHIVED IN REGISTRY No.51

1971

HICK 18/9

Mr Heath (Commodities)

IMPORT OF COTTON TEXTILES

TO TARIFFS ON 1 JANUARY 1972

1.

TRANSITION FROM QUOTAS

We spoke about this on the telephone yesterday. On the assumption that the Chancellor of the Exchequer agrees to the Secretary of State's request to reconsider Mr Noble's proposal I would like to include something on the following lines in a telegram we have in draft for Hong Kong

"Your telegram No. 291. As you will have seen from FCO saving despatch No. 95 of 18 March it is not considered here that there are likely to be adverse effects on Hong Kong's textile trade generally though the industry's apprehension on behalf of particular firms is fully appreciated. I hope however that the assurances contained in paragraph 5 of my telegram No. (which of course go beyond the narrow field of textiles) will meet this point. In this connection I am very glad to be able to tell you that a special clause is to be included in this year's Finance Bill providing for the exclusion from the tariff of cotton textiles shipped against quotas in 1971 but arriving in Britain at any time during the first 3 months of 1972.

The

2. We are planning that there should be 3 telegrams about the defence contribution one containing instructions to the Governor, the second a message to the Unofficial Members of the Executive Council and the third an annex to that message. additional paragraph set out above would go at the end of the telegram of instructions to the Governor. The assurances referred to in that paragraph will be in the telegram containing the annex.to the message from the Secretary of State. Paragraph 5 (which has been agreed with CRE of DTI) reads as follows

"HMG fully realise that despite Hong Kong's spectacularly booming economy, the Colony's future trading position is to a considerable degree dependent on external factors over which the Hong Kong Government can exercise little control. HMG have been doing and will continue to do their best to minimise the pressures which may develop against the Colony's economy as a result of these factors. If these pressures were to develop to such an extent that Hong Kong's economy were seriously threatened, a new situation would have been created and this would have to be considered both by the Hong Kong Government and by HMG in the light of the circumstances at the time."

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