TNAG-0607-FCO40-755-Monitoring-progress-made-on-planning-papers-on-Hong-Kong-1977 — Page 119

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administering restraints here the need for them has been proved.

16.

I

Stabilisation" would be bad enough, but those discriminatory

ideas seem to me to take the whole international textile trading system

dangerously near the brink of a progressive slide into protectionis, although

the Commission profess that this is precisely what they wish to avoid.

have of course said all this and much else besides, as forcefully as I

know how, in London and Brussels and we must now leave it to our negotiators.

But I think we should realise they will have an exceptionally difficult task.

In this situation we look to the United Kingdom, as a member of the EEC

but also responsible for Hong Kong's welfare, to resist discrimination

against Hong Kong in the way I have described. We recognise the difficulties

they face over unemployment in the textile industry but their demonstrated

needs for protection can of course be met by continuation of restraints on

our exports. But the discriminatory part of the EEC's proposals is not

designed to protect domestic industry so much as to re-distribute trade by

giving a large part of the principal suppliers' oxisting trade to other

exporting countries.

17

While we will watch the course of the negotiations with acute

anxiety, should not be carried away by the rama or indignation of the

moment into believing that Hong Kong's economic future, or even Hong Kong's

textile industry as a whole, are immediately at stake. We could suffer a

blow, perhaps even a heavy blow, but certainly not a mortal one. At the

worst it will confront us with a serious challenge. If so we will have no

alternative but to meet it in our usual way - with realism, stability,

ingenuity and hard work - though it is ironic that the EC pronosals anpcar

designed to favour countries in which those virtues are not so evident as

in Hong Kong.

18.

Whatever the outcome of these particular negotiations much will

depend on the general state of world economic activity and trae in 1978,

since buoyant consitions could help us through what might otherwise be a

/difficult...