If Ministers agree this approach, it is suggested that the
objective of encouraging "confidence" might be better achieved
by a letter from Ministers to the industry and its union rather
than by any further meetings with them. A draft letter
putting this approach is attached.
10. Finally, it should be noted that the British Textile
Confederation has placed considerable stress on the desirability
of a positive reaction to the case made by the knitting
industry in order to maintain the credibility of the policy
defined in the Minister for Industrial Development's letter
to Mr Lewando last August. This is we believe a matter of
some importance and if Ministers agree to the line of action
suggested above we suggest that the Minister for Industrial
Development should seck an opportunity to talk to
Mr Lewando and to endeavour to press on him that despite the
rejection on merits of the case from the knitting industry
the government's policy is still as defined in his letter of
August last, and that the government is still prepared,
within EEC rules, to consider and to act on cases for
restraints on low cost imports of textiles when this is
justified.
11. As regards our attitude to Hong Kong they of course know
of the concern felt by the knitting industry in the United
Kingdom about low cost imports. It is not yet possible to
assess whether this knowledge has encouraged them to increase
or to restrain their sales to us and whatever policy they have
been following in the recent past the situation could
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