TNAG-0334-FCO40-370-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 210

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COIDEN. . ..

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3.

We expect that Hong Kong would react strongly to

the British Government's decision; and so it proved.

The Colony's trade associations in particular have

criticised our action as being a complete breach of

faith; one that goes back on earlier undertakings by

the British Government and clear proof that we ignore

bur responsibilities to the Colony.

Against this background, we offered to discuss the

change in policy with Hong Kong officials before the

decision was announced. Talks took place on 6 and 7

December.

ber The main activity was to prepare an agenda

for further talks. However the Hong Kong Delegation

emphasised that their trade had taken decisions on the

basis of tariff only and consequently large orders had

been placed by non-quota holders. They would therefore

wish compensation for hardship; some transfer ability

between categories in the quotas and an assurance that

Hong Kong would not suffer further as a result of duty-

free competition from EFTA countries. While we

accepted these subjects for discussion at a further

meeting, we made it clear that all these requests would

raise very real difficulties for us.

5. At the further meetings in January (10 to 14), Hong

for' Kong pressed strongly for "hardship" yardage to meet

exporters who did not enjoy a big enough quota

allocation under the system operated by the Hong Kong

Government. We reminded Hong Kong of our request to all

supplying countries at the time of our quota decision to

treat pre-existing contracts as a first call on the 1972

/quotas.

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