TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 124

PS/PUS

SECRET

469

Mr

По обни

16х4

FIDIE)

Mu. O'Keeffe

HONG KONG DEFENCE COSTS AGREEMENT AND IMPORT RESTRICTIONS

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Dur..

The PUS commented on Mr O'Keeffe's submission of 9 December 1/12

that in papers which he had seen on import controls it was said, in effect, that what we did over Hong Kong was no business of the EEC, whereas the Acting Governor had implied an opposite view in Hong Kong telno. 1198. The PUS asked which view was right.

2.

I have consulted EID(E). They have advised that there are two ways of attempting to cut down on Hong Kong shirt sendings. First, in theory, we could put pressure on Hong Kong not to fill the shirt quota which has been established through the EEC/Hong Kong Textiles Agreement under the auspices of the GATT Multifibre Arrangement (MFA). In practice, Hong Kong would object strongly and this could well give us trouble with our Community partners who could argue that it was prejudicial to the Community's internal burden- sharing arrangement. The second way would be to refuse import licences at this end. This would definitely involve the Community as a signatory of the MFA. The arguments concerning these two ways of proceeding have been developed in a separate submission by Mr Arbuthnott of 11 December.

3.

If we had been in a position to persuade Hong Kong voluntarily not to fill her 1976 shirt quotas and the Secretary of State for Trade has indicated in para. 3(iii) of his minute of 10 December to the Prime Minister that there is no prospect of doing this – EID consider that we could have avoided mentioning to the Commission that such action was being taken as part of our proposed import controls package. This, I understand, is the point which the PUS will probably have had in mind in commenting on Mr O'Keeffe's submission. However, EID are now inclined to accept that even an act of voluntary restraint of this sort by Hong Kong could have

Xrepercussions in the Community if it became known that they were

acting at our request.

12 December 1975

сс

PS/Lord Goronwy-Roberts Mr Arbuthnott, EID(E)

Mr Male

D.F. Mille

D F Milton

Hong Kong & Indian Ocean Dept.

Mr Cloake, TRED SECRET

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