TNAG-0613-FCO40-761-Visits-of-Governor-of-Hong-Kong-to-UK-1977 — Page 46

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(c) Figures

MM said that cut backs had been in two stages. (1) cut

back 1976 export; (2) for major suppliers an entirely new

principle that they should be cut back further to reallocate

quota to new suppliers.

LP said there were different views on these stage 2 cut

backs. He did not like them himself. MM said that if

this new doctrine was agreed it would certainly provoke America into pressing for further cuts. LP said that it

was necessary to make some room for new suppliers. He was

sympathetic but he could not turn the clock back. He would

do what he could to contain the position. Miss McFarlane

explained that in order to contain total imports to the 1976 level plus limited growth, it would be necessary to envisage new suppliers coming into existence during the period of agreement, and make provision for quota against this eventuality.

MM said Hong Kong delegation was going back to negotiate

because of pressure from HMG and the threat of an

LP said it might be possible for them to help. He would rather think of EEC position as giving a warning rather than giving an ultimatum.

ultimatum.

MM said that in one of the telegrams from Judd the rationale

for the requirement for new countries was explained as

being part of the north-south dialogue. The wording suggested

this doctrine to be applied to other commodities.

impossible to see where it would lead.

It was

LP said there was no question of the application to other

commodities.

MM said that the issue was whether to break negotiations and

accept autonomous measures from EEC. He did not think the

Americans would follow by imposing autonomous measures. The

alternative was to sign an agreement and make it clear that

it did not comply with any of the agreements Hong Kong and

EEC had already subscribed to. He was sure the Commission had

plenty of, quota available, with which Miss McFarlane

this, offer. it she thase said that she thought

made clear

that while there was some room for manoeuvre, it would be

impossible to increase the offers to reach 1976 export figures. MM said he had not said they would.