TNAG-2978-FCO40-1470-Trade-relations-between-Hong-Kong-and-the-UK-1982 — Page 21

RESTRICTED

DEPARTMENT OF TRADE

1 VICTORIA STREET

LONDON SW1H OET

Telephone Direct Line

Switchboard

D M March Esq CBE

Senior British Trade Commissioner

Hong Kong

* 01-215 5242

01-215 7877

1 July 1982

HICK

1216

No

CGE

Mas 817

6

COLOUR TVS

1

NR

Thank you for your letter of 17 June. I do receive the monthly reports, direct from the HK Office in London, 50 no need for you to send me copies.

2

Just after your visit in May Thorn EMI made strong representations to the Department of Industry about the problem it claimed to be having in negotiating with HK producers "reasonable levels" for their 1982 exports to the UK. The attached copy of the briefing given to John Caines for his HK visit gives you the details. Some glasses are contained in the attached copy of some papers sent by MacDonald (Atkinson's replacement) in DOI to Peter Corley, including a draft of a letter which DOI would like to give to Thorn.

3 Peter Corley and I have been playing DOI's request long, posing questions (eg about why Thorn EMI feel they cannot rely on private law remedies for any breach of licensing quotas and propriety of HMG expressing views on matters which might come before the courts) and asking for further information eg on whether expansion plans by HK producers are really so significant in relation to a UK (colour TV) market (all sizes) of about 2 million sets. We have also restricted all the arguments against VRAS in relation to HK on the lines you have put to Evans of Thorn, thus making clear our view that an attempt to bluff HK into a VRA will neither succeed nor be acceptable interdepartmentally in Whitehall. We have not excluded the possibility of an innocuous letter being sent, though without so far expressing my view on the draft produced by MacDonald.

4 However, we shan't be able to drag our feet definitely. If we don't conclude matters with MacDonald the DOI will no doubt bring Ministers into play. Thorn and RIC are said by DOI to be becoming pretty impatient. My own feeling is that the MacDonald text is not acceptable but that we could swallow something on the lines of the alternative draft which I attach without our relations with Hong Kong suffering to an unacceptable degree. I should be grateful for your views on the drafts and, of course, on the wider issues, as well as any information you may have such as on the HK industry which could be helpful in countering the UK industry and DOI arguments.

-*

RESTRICTED