TNAG-0335-FCO40-371-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 35

CONFIDENTIAL

Scandinavians can offer no quid pro quo and it would weaken our

position in negotiating traffic rights with other countries if

we conceded them for nothing. If asked, the Secretary of State

may like to say that the Scandinavians have now formally requested consultations on the subject. These may take place towards the

end of November. We in the FCO will continue to do all we can

to ensure that Hong Kong's views are fully taken into account.

BRITISH TRADE INTERESTS

13. Last year the value of two-way trade between the UK and

Hong Kong exceeded £269 million, with the visible balance

considerably in Hong Kong's favour. Her exports to Britain, her second biggest customer, in 1971 amounted to £165 million, of which textiles and clothing accounted for £103.5 million. The strong

growth in exports to Britain of polyester/cotton fabrics and garments will slacken following Hong Kong's recent agreement to restrain shipments of these items.

14.

British exports to Hong Kong in 1971 totalled £104 million a 5% increase on the previous year. In the two important fields of electrical and non-electrical machinery, however, Britain is doing well, with exports in 1971 up by 11 per cent and 36 per cent

respectively on 1970. Even so, Britain's overall share of the

Hong Kong market has declined; since 1968 it has stagnated at

For

between 9% and 8%. This is in spite of the strong increase in recent years in the demand for capital goods needed for the Colony's industrial re-equipment and expansion programmes. these reasons, and to demonstrate Britain's wish to strengthen traditional commercial and other ties on her impending accession to the EEC, a major British Industrial Exhibition was held, at

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CONFIDENTIAL