TNAG-0308-FCO40-344-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 28

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TO ROUTINE F.C.O. TELEGRAM NO. 291 OF 29TH APRIL 1971 the Ahmed

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MY TELEGRAM NO. 250 TO YOU.

DEFENCE CONTRIBUTION.

Mikairo Lknow

yesterday

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we went are y THERE WAS A SLIGHTLY UNPLEASANT LITTLE EXCHANGE WITH UNOFFICIAL MEMBERS AFTER THE EXECUTIVE COUNCIL MEETING ON 23RD APRIL WHICH LEADS ME TO SUGGEST SOME EXPANSION OF THE PROPOSAL AT PARA. 5 OF MY TELEGRAM UNDER REFERENCE.

2.

P.Y.TANG, WHO HAD JUST RETURNED FROM THE U.K., EXPRESSED FRESH CONCERN AT THE EFFECT ON HONG KONG OF THE 15 PER CENT TARIFF ON COTTON TEXTILES, IN LIEU OF QUOTA, WHICH IS TO BE IMPOSED. IT WOULD MEAN A LOSS OF SOME DOLLARS 63 MILLION A YEAR TO THE HONG KONG ECONOMY, WHICH OUGHT TO BE TAKEN INTO ACCOUNT IN ESTABLISHING THE LEVEL OF THE DEFENCE CONTRIBUTION, WOULD ALMOST CERTAINLY BE FOLLOWED BY QUOTAS IN ADDITION (INEVITABLY, IF THE U.K. JOINS THE COMMON MARKET), WOULD NOT HAVE THE BENEFICIAL EFFECTS ON THE U.K. INDUSTRY CLAIMED FOR IT, THE INDUSTRY HAVING ALREADY HAD ENOUGH TIME (12 YEARS OR SO) SINCE RESTRICTIONS HAD FIRST BEEN IMPOSED BUT HAVING FAILED TO MAKE USE OF IT. IN SHORT, HE REHEARSED THE ARGUMENTS WE HAVE ALREADY USED OFFICIALLY, BUT HIS MAIN POINT WAS TO ASK WHETHER THE HONG KONG GOVERNMENT COULD NOT MAKE A CONCERTED EFFORT WITH OTHER COMMONWEALTH GOVERNMENTS, E.G. INDIA IN PARTICULAR (AS SUGGESTED IN PUBLIC HERE THIS WEEK BY THE INDIAN MINISTER OF FOREIGN TRADE), TO PROTECT THIS MEASURE FURTHER..

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3. THE FINANCIAL SECRETARY AND I ENDEAVOURED TO EXPLAIN THAT H.M.G.'S DECISION WAS A FIRM ONE AND WE HAD BEEN UNABLE TO MAKE ANY IMPRESSION WITH SIMILAR ARGUMENTS DURING PREVIOUS DISCUSSIONS. IT WAS UNLIKELY THAT AN ATTEMPT AT CONCERTED ACTION OF THE KIND PROPOSED WOULD HAVE ANY RESULT.

/40

laurel.

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