TNAG-0345-FCO40-381-UK-and-Hong-Kong-talks-on-cotton-textiles-1972 — Page 115

CONFIDENTIAL

27

1.

M. Laird

(for FCO eyes only

only)

Following on from Sir L Monson's account of his talk with the Hong Kong unofficials I should record that I telephoned to Mr Royle shortly after 10 o'clock on the evening of 14 January to inform him of the outcome of the talks with the Hong Kong delegation. He telephoned me back on the morning of 15 January to suggest that I should try and get in touch with Mr Cater to ask him to speak to the unofficial members of EXCO to try to impress upon them the importance of not saying anything on their return to Hong Kong which would make the constitutional position between HMG and the Hong Kong Government more difficult in the situation where what had happened was that the unofficials and the textile advisers had disagreed with the judgment of the Financial Secretary. I am afraid that I failed totally in the course of 15 January to get hold of the Hong Kong Government office on the telephone although Mr Haddon-Cave had told me he was there. I was not therefore able to obtain Mr Cater's telephone number. Late on 15 January, however, I spoke to Mr Haddon-Cave at his hotel and he told me that he had had a long talk with Sir S Gordon that morning before he left for Hong Kong in which he had made precisely the points which Mr Royle had been hoping Mr Cater would make to him. Sir Y K Kan had himself already left for Milan.

2. On 17 January I got Mr Cater's telephone number and spoke to him at his home (where he is on leave for the next couple of months). I asked him how he had seen the package which Mr Haddon-Cave had negotiated and why it was so unacceptable to officials. Mr Cater said that as we knew the Hong Kong position (on the advice of the Textile Advisory Board) had concentrated on two things:

(a)

hardship, by which was meant that HMG must do something to assist manufacturers who in good faith had entered into contracts in the belief that there would only be tariffs in the UK and not quotas and who now find themselves in the position of having no access to the quota market. On this Mr Cater said the Hong Kong unofficials considered "that they had got virtually nothing in terms of hardship". Moreover, he said that they were under the impression from what the DTI had said that they were unlikely ever to get anything and they stressed that the DTI had given no.

/guarantee

CONFIDENTIAL