CONFIDENTIAL
From the
Secretary of State
DEPARTMENT OF TRADE AND INDUSTRY
1 VICTORIA STREET
The Rt Hon Sir Alec Douglas-Home KT MP Foreign and Commonwealth Office
Downing Street
SW1
My
diar Alic,
LONDON S WI
01-222 7877
42
February, 1972.
Commoditics West
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Moln-Rayla
17° Bottomley / Nikeable
My Wilfor
H.v. Dept.
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48
412
Thank you for your letter of 1 February.
John Eden is writing to Anthony Royle to say that we could consider a little more flexibility between categories in the Hong Kong quotas provided that the total effect of these changes does not exceed that of the offer which we have already made to Hong Kong. The more we concede to Hong Kong's requests for flexibility the greater the threat to Lancashire (who will be critical enough as it is of the concessions we have already offered) and the greater the risk that we shall be pressed for concessions by other restricted countries.
I hope you will be able to re-assure Hong Kong about the attention we have paid to their interests. It is now quite certain from the information available to us about orders placed with Hong Kong's competitors, especially Pakistan and Taiwan, before our decision to keep quotas in 1972 that Hong Kong would have lost business heavily if trade had remained unrestricted in 1972; much of this business will stay with Hong Kong, whose exporters are again charging the premium which exporters with quota allocations can command. I think that these circumstances, together with the very considerable concessions of flexibility which we have already made to Hong Kong in the clothing sector which interests her most, show that our policy takes very fair account of Hong Kong's special position and interests.
Your
Jon.
ошно вими
JOHN DAVIES
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49
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