TNAG-1466-FCO40-1993-Visits-by-Sir-Edward-Youde--Governor-of-Hong-Kong--to-the-UK-1986 — Page 27

CODE 18-77

TO:

Mr Beston OT2/3

FROM:

MD C Johnson

ITP 1

V/452

215 5458

13 February 1986

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1) cc Mr Hill

દ

Mr Ashton FED (p.6)

2) Mr Gordon

tra Hong Kong FATT

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« China & GATT

Ju 17/2.

Reference...

A Coffel (49 Mata и том The has

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cc Mr Williams Re

Mr Lane ITP

Mr Sharp ITP3

Mr Armstrong CTPS Mr Warren FCOL Mr Madelin ITP1A Mr Stone ITP1B Mr WJ Hall OT2

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ce para 7 to Brut. Chamber of

Comence file

MR WILLIAMS' MEETING WITH THE GOVERNOR OF HONG KONG,

11 FEBRUARY 1986

1 I was present when Mr Williams received a short call from Sir Edward Youde on 11 February. The following were the main points discussed.

Textiles/MFA Renewal

2 Mr Williams explained in familiar terms the Government's policy, including the link between the MFA negotiations and the new GATT Round; the importance of getting the NICs to assume a greater measure of GATT obligations in the new Round; and the desire to give some measure of preferential treatment under the MFA to the more liberally- inclined LDCs to encourage the graduation process. He also explained the political environment within which the EC was attempting to settle its negotiating mandate for the MFA discussions, and the extra weight which Spain and Portugal have now added to the protectionist side in the Community. In particular, Spain and Portugal now had a vested interest in maintaining the MFA restrictions, because of the position which they as major textile and clothing producers would have in the EC market.

3 In answer to a question from Sir Edward about how vulnerable the UK textile and clothing industry was, Mr Williams said that the industry still employed a half million people but it clearly felt very vulnerable and was lobbying hard against liberalisation of the MFA.

Possible Free Trade Area US/Hong Kong/Singapore

4

Sir Edward had little to add to the recent exchange of telegrams with the Hong Kong Government on this subject. He said that it was not clear what the US might get out of a possible free trade area agreement, since Hong Kong had hardly any tariffs and therefore virtually no concessions to offer. This might be a way for the Americans to "get at" (I assume this meant extract better market entry from) Korea and Taiwan, by appearing to give preferential treatment to their nearby NIC neighbours. However, it was not likely that the US Congress would be very receptive to the idea of giving improved access for Hong Kong to the US market.

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