TNAG-0612-FCO40-760-Visits-of-Lord-Goronwy-Roberts--Minister-of-State-for-Foreig-1977 — Page 15

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the view that the poorest developing countries should benefit from, eg the MFA. He was also told that renegotiation was important to Hong Kong since if there were not a satisfactory renegotiation, the UK might be forced to fall back on action under Article 19 of GATT, ie total restrictions on all imports of textiles.

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Since agreement has not yet been reached within the Community, it is suggested that the Minister of State should neither deny nor confirm the rumours referred to above, but should merely reiterate that many ideas are being canvassed within the Community on proposed changes in the MFA by the end of March. On the implied threat that if the UK does not help Hong Kong over the MFA social programmes in Hong Kong will have to be cut back, it is suggested that the Minister should say that we accept that economic growth is important for Hong Kong but we are very doubtful whether the kind of restrictions on imports of Hong Kong textiles which might emerge could significantly affect economic growth. We could not accept that suchrestrictions would put the fulfilment of the Hong Kong Government's social programmes in jeopardy. The preview of the 1977/78 budget shows that revenue is bouyant and the social programmes could, if necessary, be financed by increased taxation.

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