TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 123

. It was agreed that arrangements of the type concluded between the

UK and Hong Kong were desirable, in that both sides could live reasonably happily with them, and they could be justified in international terms. It is instructive to note, incidentally, how the Hong Kong attitude to these restraints has changed from grudging acceptance to glowing commendation, now that they see themselves threatened with something far worse from another quarter! We wondered, however, whether the EEC would accept this model; would they not be more likely to aim for something similar to their existing cotton agreement with Hong Kong? This is of course far less satisfactory to Hong Kong, in that it freezes trade at very low levels in some Member States, with no agreed justification in terms of disruption. We learnt that it was negotiated by Ernst, with representatives of the Six present but largely if not wholly silent at each session. Mr Ho blamed Ernst for the "misunderstanding" over conversion factors, and explained that Hong Kong had only been willing to accept the agreement because it permitted by means of the bogus conversion factors a vast increase in Hong Kong's exports to Germany of cotton made-up goods.

You

Robin

RP Hope

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