TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 126

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IMPORT CONTROLS

Head ETD (E)

With the limited time now at our disho sal before the

Christmas recess, we must it seems to me now take a final decision on the selective import control package. My views

are these.

2 First, as regards cars, I do not accept that, if we maintain a much reduced element of Chrysler production by the injection of Government money, we therefore have to abandon the project to impose import restrictions. I quite accept "that" to ‘go' to 'the Commission both for approval for import controls under Article 135 (of the Treaty of Accession) and for consent to State aids to Chrysler under Article 23 (of the Treaty of Rome) would be more difficult than going for either one of them by itself. But I do not think that this rules out applying for both; the political case is a compelling one and the Commission must be made to waderatend this. The arguments which we could use are that:

i import controls and the Government injection of money

are parts of a composite plan to restructure the whole of the British car industry, and that, given the disruption that is bound to be caused by the

restructuring process, it is necessary to restrict imports until that process is complete and production

is once more flowing smoothly;

ii although the Article 135 and Article 93 applications ker been triggered off by the difficulties which have arisen in relation to Chrysler, the restructuring probleris stemmnd initially from difficulties faced by British Leyland a year ago and have been compounded by the Chrysler problem;

iii it is not reasonable to expect a major industrial

country auch as the UK to accept the rapid rise in import penetration to such high levola in an industry, as basio to our manufacturing position, as cars.

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