TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 137

362)

Mr Cortazk

COVERING CONFIDENTIAL

HONG KONG/EEC TEXTILES

1.

#KK 121/6/6/1

Jelg

"P.A. No 75.9k

اة

You will wish to see the attached study by Mr Hull of the Economists on the extreme effects of the best and worst results of the renegotiation of the Textiles Agreement with the EEC. You will also wish to see Mr Thompson's commentary.

2.

All the indications are that Hong Kong will be dragged reluctantly to signing a bilateral agreement with the Community and that paragraphs 5 and 6 of Mr Hull's memorandum will apply. I do not myself agree that the unemployment caused by

considerable reduction in the textile quotas has already occurred.

I agree with Mr Thompson that it is likely that many

manufacturers are still keeping some spare labour in hand which they could not do if there were a continuing depreciation in the textiles industry.

J A B Stewart

Hong Kong & General Dept

24 November 1977

Thank

you

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