PRIORITY
CYPHER/CAT A
GPS 1000
HONG KONG 84105UZ
CONFIDENTIAL
CONFIDENTIAL
1973
رسی
TO PRIORITY FCO TELMO 368 OF 4 APRIL/INFO UKREP BRUSSELS ERUSSELS (FOR DODGE) HONG KONG GOVERNMENT OFFICE LONDON (FCO PLEASE PACS).
YOUR TELNO 451 TO UKREP
BRUSSELS.
NON-COTTON TEXTILES FROM HONG KONG.
WE ARE STILL STUDYING THE PROS AND CONS OF UNILATERAL RESTRAINT
TO THE BENELUX, WE RECOGNISE THAT YOU FAVOUR SUCH A MOVE AND WILL., OF COURSE, GIVE FULL WEIGHT TO THIS, HOWEVER, WE FORESEE SERIOUS DIFFICULTIES IN SELLING THE IDEA TO THE TEXTILES ADVISORY BOARD AND
THROUGH THEM TO OUR TRADE AND INDUSTRY, OUR UNILATERAL GERMAN RESTRAINT ON POLYESTER/COTTON HAS CAUSED A GOOD DEAL OF
DISCONTENT IN THE TRADE WHICH, BECAUSE OF OUR THABILITY TO EXPLAIN THE FULL FACTS, DEES SCANT JUSTIFICATION FOR OUR ACTION. MEMBERS OF TEXTAB ARE, OF COURSE, ASSOCIATED WITH THIS ACTION AND THEY ARE, NATURALLY, SENSITIVE TO THESE CRITICISMS. FURTHERMORE, THE RECENT CHANGES IN FOREIGN EXCHANGE RATES (INCLUDING OUR OWN ACTION IN NOT DEVALUING THE HONG KONG DOLLAR) HAVE SERIOUSLY SQUEEZED OUR INDUSTRY'S MARGINS, AS MOST OF THEIR SALES CONTRACTS ARE EXPRESSED IN U.S. DOLLARO, WITTLE, BECAUSE OF THE CURRENT SHORTAGE OF FABRICS THEIR SUPPLIERS ARE HOLDING THEM TO RANSOM OVER THE COST OF THEIR
MATERIALS, CO THE INDUSTRY FEELS AGGRIEVED BY EVERYTHING WE HAVE
DONE.
>
2. THERE IS YET ANOTHER COMPLICATION OVER OUR RESTRAINT TO GERMANY. A LARGE PROPORTION OF THIS PARTICULAR SECTION OF THE TRADE IS MADE UP OF GERMAN COMPANIES WHICH HAVE ESTABLISHED THEMSELVES HERE AS
·OVERSEAS OFFICES OF THEIR PARENT COMPANIES IN THE MAIL ORDER,
WHOLESALE AND CHAINSTORE FIELD. THE PARENT COMPANIES ARE INFLUENTIAL MEMBERS OF THE EEC IMPORTERS ASSOCIATIONS AND, WE HAVE BEEN TOLD,
ARE ACTUALLY PUTTING PRESSURE ON THE GERMAN COVERNMENT TO DO
SOMETHING ABOUT WHAT THEY SEE AS AN UNNECESSARY SWING TO
RESTRICTIONISM BY THE HONG KONG GOVERNMENT. THIS MAKES OUR OWN
INDUSTRY EVEN MORE SUSPICIOUS OF OUR ACTION.
CONFIDENTIAL
13.
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