Mr Stewart Jas
Mr Thompson
TEXTILES
CONFIDENTIAL Reference
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* MAR 1978
(3)
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DELK OFF INDEX
PA
1. As anticipated, I was given a fair old ear-bashing over the way Britain had "let Hong Kong down" over textiles. This criticism came not only from the Trade Industry and Customs Department (and the textile industrialists they introduced to) but also from the Government Information Services, who complained that their task of projecting the British image in Hong Kong had been made almost impossible.
2. I did not see much point in getting into detailed arguments over this: we and Hong Kong clearly look at this sort of problem through opposite ends of a telescope, with Britain looming so large in Hong Kong's vision of the world that any action by Britain that has any effect on Hong Kong is inevitably seen as a policy deliberately directed against Hong Kong.
3. I remained at the end of my stay singularly unconvinced that much harm had been done to Hong Kong's interests. The claim by Hong Kong that it would be impossible to adopt the new categoris- ations without a transitional period of several months proved to be a typical Hong Kong exaggeration: Trade, Industry and Customs in fact completed the work before the end of December (admittedly by dint of much overtime and by bringing in extra staff from other departments). It was also admitted that, since 1976 was a boom year, the quotas, despite the cutbacks, allow some room for growth in 1978, and it is not until 1979 that growth is going to be restrained unless by then provision has been made for compensatory growth in other sectors. In the meantime, there was no immediate prospect of unemployment as a result of the new agreement.
4. I understand that Hong Kong have asked us, or are about to ask us, to take action in the GATT against Norway because of their policy towards Hong Kong textiles. It was urgently represented to
me that we should agree to support this request. If we do so, it will go a long way to refurbish our image in Hong Kong. If we do not, it will confirm Hong Kong's opinion that Britain is not to be relied on. I do not understand all the details of what is involved, but I hope it will prove possible for us to take this action on Hong Kong's behalf. Quite apart from the merits of the case, it provides an invaluable opportunity for us to restore Hong Kong's confidence in Britain (at least until the next time that they decide we are picking on them!).
CODE 18 - 7
6 March 1978
W.E. Chantill
WE Quantrill
Hong Kong & General Dept
CONFIDENTIAL
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