TNAG-0332-FCO40-368-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 45

Confidential

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to accept 10 million, but had been offered only 4.6 million. Under pressure, DTI had just agreed to increase to 10 million, but with conditions which were novel and damaging and this was

unacceptable.

4..

S. of S.asked what effect an allowance of 10

million yards would have on Lancashire. Mr. Haddon-Cave said that, in his view, there would be no discernible effect on the U.K. market. For its part Hong Kong was principally interested in obtaining some amelioration as a gesture. Sir Stanley Tomlinson said that he thought that DTI could be persuaded to change its outlook. Mr. Laird added that he had been surprised to see the DTI offer, as he had not heard of a proposal involving these conditions when he had left U.K., he had expected an offer half-way to the H.K. position - as suggested by the Governor. He thought that DTI had brought in the conditions in an attempt to respond to pressure from the FCO and at the same time avoid trouble with Lancashire. Mr. Haddon-Cave emphasised that the conditions proposed by DTI could not be accepted as they would set a dangerous precedent prejudicial in other and more important negotiations. Sir Hugh Norman-Walker underlined the danger of Hong Kong accepting any agreement which included swing rights being subjected to qualitative as well as quantitative limits. S. of S. asked what was the minimum swing acceptable to TEXTAB. Mr. Haddon-Cave suggested that it would be between 7 and 8 million yards, without conditions. S. of S. then said that a telegram be sent to DTI proposing a swing of 7.5 million yards

ithout conditions.

Textile negotiations Long Term problems

5.

Mr. Haddon-Cave said the prospect for Hong Kong for the next eighteen months must be considered against the following background: -

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