TNAG-0387-FCO40-433-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 28

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INKK 6/6

M. Gfelle

This caus all night, And I didn't get the attachments

Mr Crowson

RACE TREN-51

10 AUG 1973

ARR616

PRORSED RESTRAINTS ON IMPORTS OF POLYESTER COTTON TEXTILES FROM THAILAND, MACAO AND COLOMBIA.

You will wish to see the attached paper from DTI,

especially Miss Lowne's covering minute and the recommendations on the final page.

2.

The DTI are considering restraints on Thailand, Macao and Colabia on the lines of the present restraint agreement with Hong Kong. Hong Kong's interests are not directly involved except to the extent that any increase of sales of polyester cotton in the UK market could be argued as cornering part of the market which would otherwise have been Hong Kong's were she not already under restraint. To this e tent the proposed restraints on these three countries very welcome toher. We have always xxi argued against actions discriminating against Hong Kong and these new measures are fall within this context & remoue

ill be

possided dikerin -

ûchn

3. However the DTI confirm my suspicions that those firms in Thailand and Macao which are breaking into the UK market with such vigour are in fact mostly, if not entirely Hong Kong financed and based. Whilst it would be difficult therefore for the Hong Kong Govt to object too strongly over these developments because of the arguments in paragraph 1 above there are likely to be strong rumblings from industry and the banks. However I think the arguments in paragraph 1 are paramount.

4.

There is also the degree to which these proposals, taken as they must be with the approval of our EFC partners will encourage them to renew their own efforts vis-a-vis restraint arrangements with Hong Kong. Whilst these may be of psychological importance they are unlikely to be of major practical effect. The

members of the EEO are no longer pressing for restraints on Hong Kong and what we would be proposing would be in effect voluntary arrangements reached between Hong Kong and Germany.

5.

I recommend that we agree with the DTI proposals

cc Mr Hazle TRD

(M A Goodfellow)

3 August 1973

(17293) 897465 400m 1/73 G.W.B.Ltd, Gp.863