TNAG-0345-FCO40-381-UK-and-Hong-Kong-talks-on-cotton-textiles-1972 — Page 162

JJP/A

UNITED KINGDOM TEXTILE POLICY

BRIEF FOR MEETING WITH REPRESENTATIVES OF HONG KONG GOVERNMENT TO BE HELD MONDAY 10 JANUARY 1972 ET SEQ

I BASIS FOR THE PRESENT TALKS

Following the discussions held with the Hong Kong delegation in December 1971 a letter was sent on a confidential basis from Mr Ridley, Under Secretary CT Division, to r Haddon-Cave, Financial Secretary to the Hong Kong Government. The texts of this letter and of the Press Announcement issued at the end of the meeting are reproduced below.

Letter to Mr Haddon-Cave

"During the course of discussions on 6 and 7 December about HIG's decision to retain the existing quotas on cotton textiles from Hong Kong and the other currently restricted countries, you put it to us that if the Hong Kong Government is being asked to accept that Lancashire now faces a new and unexpected situation, HMG must recognise that the policy decision to retain quotas and proceed with the introduction of the new Commonwealth tariff creates a new and unexpected situation for Hong Kong. In these circumstances, we agreed that further talks should take place in the week beginning 10 January 1972, and you indicated that you would like these talks to cover, in a serious and meaningful way, how the effects on Hong Kong of this new policy could be ameliorated.

To this end, you said that you would like the talks to consider the following possibilities:

a

b

Modifications in the present UK/Hong Kong quota arrangements, that is to say,

i

ii

a once-for-all transfer of yardage into Group IV from Groups II, III and V (partly to recognise the changing pattern of the trade, and partly as con- pensation for the reduced competitiveness of fabrics);

modernisation of the categorisation of the trade covered by Group IV, perhaps in line with the cate- gorisation in the Hong Kong/EEC bilateral agreement on cotton textiles.

Compensation for hardship cases in the form of uncategorised yardage to accommodate,

i orders booked by non-quota holders;

ii

orders booked by quota holders in excess of quota rights.

An "up-swing" facility and swing between specific categories in Group IV (to provide an opportunity of trading-up in order to off-set the reduced competitiveness of fabrics).

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