TNAG-0386-FCO40-432-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 87

PRIORITY

CYPHER/CAT A AND BY BAG

GPS 540

FM F C 0 231705Z

CONFIDENTIAL

FRAME

47

CONFIDENTIAL

PA

26

(MTC 13/393/1)

(c)

N

1973

TO PRIORITY UKREP BRUSSELS TELEGRAM NO. 451 OF 23 MARCH INFO PRIORITY

HONG KONG INFO SAVING BRUSSELS (FOR DODGE),

(43) (4)

YOUR TELEGRAMS 1477 AND 1518: NON-COTTON TEXTILES FROM HONG KONG.

1. IN CONSIDERING THE NEXT MOVES WE ARE INTERESTED IN THE POSSIBILITY OF A SOLUTION OF THE KIND SUGGESTED IN PARA 5 OF YOUR TELEGRAM NO. 1519, IE COMMUNITY QUOTAS WITH MEMBER STATES' SHARES HIGH ENOUGH TO BE NON-RESTRICTIVE WHERE THERE IS NO DISRUPTION. BUT BEFORE CONSIDERING EXHAUSTIVELY WHETHER THIS WOULD IN FACT BE A. DESIRABLE AND/OR B. ATTAINABLE, WE SHOULD BE CLEAR ABOUT THE QUESTIONS BEING ASKED AND THE ANSWERS WE WISH TO GIVE.

*

2. Q. 13 THERE NOW A PROBLEM CONCERNING HONG KONG'S EXPORTS OF NON-COTTON TEXTILES TO THE COMMUNITY?

A. WE DO NOT KNOW, BUT THERE MAY BE, SINCE GERMANY IS REASONABLY HAPPY WITH THE UNILATERAL ACTION TAKEN BY HONG KONG AT THE END OF JANUARY: THE THREE NEW MEMBER STATES HAVE SATISFACTORY BILATERAL ARRANGEMENTS: AND HONG KONG'S EXPORTS TO FRANCE AND ITALY ARE NEGLIGIBLE: SO THE PROBLEM IS CONFINED TO BENELUX. IN FACT, WE KNOW UNOFFICIALLY THAT IF IT EXISTS AT ALL IT IS CONFINED TO THE

NETHERLANDS,

3. Q. HOW CAN THE EXISTENCE OF THIS ALLEGED PROBLEM BE DEMONSTRATED?

A. BY THE PRODUCTION OF STATISTICS SHOWING THAT HONG KONG'S INCREASING SHARE OF THE MARKET IS CAUSING OR THREATENING DAMACE TO DOMESTIC PRODUCERS, SUCH AS SHORT-TIME WORKING, LOSS OF EMPLOYMENT, TRADING LOSSES, SHELVING OF INVESTMENT PLANS, THE

/BENELUX

CONFIDENTIAL