CONFIDENTIAL
2.
This
(which reflects lack of demand in the-recessional situation in Europe), and with only the smallest prospect of growth in these items thereafter. would nail Hong Kong's export possibilities down to current depressed levels or below them.
5.
6.
As I see it:
a) an agreement along the American lines would be accepted here, sadly but without bitterness;
b) a small cutback in quota possibilities for sensitive items though such a thing has never been imposed in the past be accepted if the effects could be isolated
might
box,
to trade with the EEC. But for reasons given a fiftir
fford Lit
in paragraph 6 there is no possibility of this. The effect on Hong Kong would there- fore be much more serious than that intended by the EEC, and would be unacceptable.
c) If the sort of levels Tran envisaged were imposed there would be a significant and immediate effect on actual exports and on employment, and of course a much more severe cutback in the possibilities of trade with the. EEC with consequent effect on employment possibilities here and on the growth rate of the economy. All this is analysed in the
memorandum.
It would be had enough if these effects were confined to trade with the EEC, but they would not be. Norway and Sweden and Canada would certainly claim similar treatment, and, far more important, very likely the Americans will also do so since they accompanied their agreement with a confidential note advising us that they would seek consultations if more favourable terms' were agreed with another importing country.
7.
All this could add up to an abrupt shock to employment, the economy, confidence and attitudes to the
who I am afraid would be held responsible for the EEC's action.
UK
No comments yet.
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