TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 141

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IMMEDIATE

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4K #KK 12

121/616/1

-PA "No

MA

2829/1

(360)

TO IMMEDIATE UKREP BRUSSELS TELNO 2188 OF 24 NOV.

FOR SIR DONALD MAITLAND FROM SIR LEO PLIATZKY,

HONG KONG TEXTILES: MI PT.

350

WHEN THE GOVERNOR OF HONG KONG CALLED ON ME ON 23 NOVEMBER I SAID THAT WE WOULD DO ALL WE COULD TO PREVENT THE REAL PROBLEMS OF SUBSTANCE FROM BEING AGGRAVATED BY MISUNDERSTANDINGS ON RELATIVELY TECHNICAL DIFFICULTIES. IT SEEMS TO US ONLY COMMON SENSE TO SET UP PROPER TRANSITIONAL ARRANGEMENTS TO ALLOW ALL THE EXPORTERS TO ADAPT TO THE NEW PRODUCT CLASSIFICATIONS WHICH WILL BE AN ENORMOUS JOB. I KNOW THE SUBJECT IS BEING DISCUSSED AT THE MOMENT BUT IT IS NOT CLEAR HOW FAR THE COMMISSION HAVE YET THOUGHT IT THROUGH. I UNDERSTAND THE ISSUE OF EXPORT CONTROL HAS NEVER REALLY BEEN IN DOUBT (ALTHOUGH NO TEXTS WERE AGREED) BUT SOME OF TRAN'S REMARKS ABOUT QUOTA ADMINISTRATION HAVE CLEARLY WORRIED HONG KONG. . I WOULD BE GRATEFUL IF YOU COULD MAKE SURE THAT THE COMMISSION

ARE AWARE OF THE IMPORTANCE OF BOTH THESE POINTS.

2. ON FIGURES, WE LEFT THE GOVERNOR IN NO DOUBT THAT, EVEN WITH THE FLEXIBILITY ON SOME PRODUCTS, THERE WOULD BE CUTBACKS ON 1976 LEVELS. THE GOVERNOR SAID HE UNDERSTOOD THIS (THE FIRST TIME THERE HAS EVER BEEN ANY TACIT ACKNOWLEDGEMENT OF THE PRINCIPLE OF CUTBACKS) BUT SAID IT WAS A MATTER OF DEGREE AND THAT HONG KONG OBJECTED TO BEING CUT BACK TO MAKE WAY FOR NEW SUPPLIERS,

WE HAD THE FEELING THAT HONG KONG WILL PROBABLY STILL SIGN IN THE. END PROVIDED THERE IS NO FURTHER PROVOCATION FROM THE COMMISSION.

!

CONFIL

CONFIDENTIAL

"IT IS THEREFORE