TNAG-2978-FCO40-1470-Trade-relations-between-Hong-Kong-and-the-UK-1982 — Page 19

A J Macdonald Esq Department of Industry

29 Bresenden Place

London SW1E 5DT

CONFIDENTIAL

Foreign and Commonwealth Office

London SW1A 2AH

8 July 1982

HICK 121/6

12

Dear Macdonald,

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PROPOSED PAL QUOTAS ON EXPORTS OF COLOUR TV SETS FROM HONG KONG TO UK DURING 1982

Thank you for your letter of 24 Juné. I have looked at this very carefully but I am afraid that I see real objections to the idea of official support by HMG for what appears to amount to a Voluntary Restraint Agreement (VRA) on Hong Kong tele- visions. As you know, there was some discussion last year, particularly during the run-up to Mr Baker's visit to Hong Kong, of whether we should approach the Hong Kong Government over the possibility of a VRA on the export of colour televisions from Hong Kong to the UK. It was agreed then that any approach of this kind would be a mistake, at best simply an ineffectual approach, at worse a damaging source of friction in our commercial and political relations with Hong Kong. The arguments against provoking a row have, if anything, increased over the past year. As concern over the future of the Territory mounts, and as the visit by the Prime Minister in September approaches, people in Hong Kong will be looking for reassurance of HMG's overall support. In particular, the likelihood of dissatisfaction over the Multi-Fibre Arrangement will make it a very bad time to take any steps which look like a further move towards protectionism directed against an open- market economy where we badly need to improve our commercial performances.

In any case, I am not sure whether the action you propose would be compatible with Community law. We are consulting our Legal Advisers on this.

5

I have seen Peter Corley's minute to you of 30 June, with which I agree entirely. If you think a meeting of the departments concerned would be helpful, I should be happy for someone from the FCO to be there.

Bu I weeke

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P M S Corley Esq, OT4, DOT

D M March Esq

Yours sincerely,

Alaw Houeld

A E Donald

CONFIDENTIAL