TNAG-0333-FCO40-369-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 125

PRIORITY

CYPHER/CAT A

FM FCO 211815Z

CONFIDENTIAL

PERSONAL

CONFIDENTIAL

Euler +PA.

Comed to HKK 6/565/8

(138)

TO PRIORITY PERSONAL GOVERNOR HONG KONG TELNO 808 OF 21/9. 1972

MIPT: POLYESTER COTTON TEXTILES

PERSONAL FROM SECRETARY OF STATE

1. BEFORE YOU RETURNED TO HONG KONG, CHRISTOPHER CHIT AWAY

AND OFFICIALS OF THE DTI AND FCO HAD EXPRESSED THEIR CONCERN

TO YOU OVER THE SERIOUS DANGERS INHERENT IN THE FAILURE 50 FAR

TO REACH AGREEMENT OVER RESTRAINTS ON HONG KONG'S EXPORTS TO

BRITAIN OF POLYESTER COTTON TEXTILES.

2. 1 SHARE THIS CONCERN. WE HAVE DONE ALL WE CAN TO FIND A

REASONABLE BASIS FOR SETTLEMENT, AND GIVEN THE STRENGTH, WHICH MY COLLEAGUES AND I HAVE ACCEPTED, OF THE BRITISH BUSTRY'S CASE, WE HAVE VERY LITTLE ROOM FOR MOVEMENT IN THE FOURTHCOMING-

RESUMPTION ON 29 SEPTEMBER. IF THERE WERE NO OTHER WAY TO SECURE

A REASONABLE SHARE OF THE BRITISH MARKET FOR OUR INDUSTRY, I WOULD HAVE NO ALTERNATIVE BUT TO CONSIDER WITH MY COLLEAGUES TIME

POSSIBILITY OF IMPOSING A RESTRAINT ARRANGEMENT ON HONG KONG

EXPORTERS. WE SHOULD BE MOST RELUCTANT TO DO THIS ADA IT WOULD

BE IN NO-ONE'S INTEREST. WE REALISE THAT IT WOULD MAKE YOUR

POSITION VERY DIFFICULT AND COULD WEAKEN THE WHOLE POLITICAL

STRUCTURE OF THE COLONY, AND BY ESTABLISHING A PRECEDENT FOR ARV

IMPOSED SOLUTION IT COULD PREJUDICE SUBSEQUENT NEGOTIATION S

BETWEEN HONG KONG AND THE COMMUNITY. CONVERSELY, AS AGREED SETTLEMENT WOULD STRENGTHEN HONG KONG'S POSITION WITH THE

COMMUNITY.

3. SHOULD THERE BE A BREAKDOWN IN THE TALKS, I HAVE ASKED THAT' MINISTERS SHOULD CONSIDER THE NEXT MOVE AND HAVE THE BENEFIT OFF

YOUR ADVICE ON HOW BEST WE COULD SECURE THE NECESSARY SAFEGURIDS

WITHOUT MAKING THE RISK OF A REAL CRISIS OF CONFIDEIGE MY GELATER

THAN CAN BE AVOIDED. I AM IN NO DOUBT THAT RESTRAINTS WILL COME

BUT I HOPE THEY CAN BE AGREED BETWEEN US,

14. I

CONFIDENTIAL