TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 41

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Department of Trade and Industry

7

Millbank Tower Millbank London SW1P 4QU

Telex XXXX Telegrams Advantage London SW1

Telephone 01-834 £255xext

4422

918829

Mr M A Goodfellow

Hong Kong Dept

Foreign & Commonwealth Office

737

Enter

Your reference

Our reference

C7272

Date

2. May 1973

RECEIVED IN REGISTRY No 37

with

HONG KONG TELEGRAMS 428 AND 429 OF 24 APRIL

MWE3/393/1

We spoke last week about these two reactions from Hong Kong to the account of the Brussels textile meeting on 16 April contained in telegram 2093. I suggested that

it was not urgently necessary to reply to Hong Kong by telegram.

4

On the question of exports of non-cotton textiles to the Benelux, my letter of 25 April to John de Fonblanque fills out the record and emphasises the contrast between how the Dutch behave in a Community context and the impression they give in more informal contacts with Hong Kong Government officials.

We do of course agree with Hong Kong that the best solution, in the present circumstances of no free circulation, would be a bilateral one. We are glad that we were able last year to achieve a bilateral solution of our own non-cotton problems with Hong Kong. But the realitics of life in the European Community must be faced, however Alice-through-the-looking-glass they appear. The Dutch would loce marks for anti-Community behaviour if they did negotiate bilaterally, with or without the Commission's consent, and Hong Kong should not underestimate the importance of this.

*

As for the timing of EEC/Hong Kong talks about 1974, we realise that the autumn is late from a trade point of view, and we would like to see a picture of the likely quota situation beginning to emerge during the summer. There is no reason why work on the main lines of this picture should not proceed in parallel with the multilateral development of a new Agreement, and I doubt whether Hong Kong would in practice be forced in the process to sign away anything that might later turn out to be its "right" under a new Agreement. In any case, the amounts and destination of Hong Kong's textile exports to Europe in 1974 are to a large extent predictable from the present pattern of trade and restraints; we do not think that the manufacturers will be sitting on their hands later this year, waiting for news from Brussels in order to decide how much to make of what, while their factories grind slowly to a halt.

We do not yet know the result of the Dutch re-examination of the latest list of sensitive products, and we are unwilling to predict whether there will be a bilateral discussion or a mandate for restrictions on a Community basis. Kong should not be unduly surprised if it turns out to be the latter.

Hong

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