TNAG-0329-FCO40-365-Briefs-for-UK-officials--visits-to-Hong-Kong-1972 — Page 12

CONFIDENTIAL

DTI with a request for restraints on polyester cottons.

Hong Kong supplies 42% of UK imports of polyester

cottons; only 5% come from other developing countries

The remainder are supplied by developed countries,

against whom it is considered impossible to impose

restrictions (they would retaliate!). Hong Kong

prices are considerably cheaper than our own and the

quality is better; but so are those from developed

countries such as West Germany and the United States.

The restrictions would therefore be aimed almost

entirely at Hong Kong. The DTI are seeking agreement

of their ministers in principle to the imposition of

restraints on such imports from Hong Kong. We have

emphasised to them the importance of taking the

Government of Hong Kong fully into our confidence and

not presenting them with a cut-and-dried decision.

EEC Textile Policy

3. The DTI have prepared a draft memorandum for sub-

mission to the Commission about the philosophy which

should underly the enlarged Community's textile poli-

cy. It is a liberal document and has general FCO

support; it is much more liberal than proposals sub-

mitted by the British Textile Employers' Association.

It proposes a new Long-term Agreement. In cases

where restrictions on textile items are to be phased

out by the end of a transitional period, it suggests

that import quotas should gradually be levelled up.

In other cases, where restrictions are not to be phased

out in short-term, a more complex but still liberal

formula would apply. The Commission have been propo-

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