0003230
G.F. 323
CONFIDENTIAL
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regarding imports of cheap Japanese umbrellas. Benelux trade relations with Mainland China were such that the Benelux Governments were able unilaterally to prohibit the import of umbrellas from China at such low prices as to cause serious damage to Benelux production.
3.
Mr. Verhagen added that he would ask Mme. de Clercq to table statistics to substantiate the Benelux claim that there had been a sharp and substantial rise in imports of umbrellas at prices below those prevailing on the Benelux market which was disrupting the Benelux industry.
4.
Mr. Miller confirmed that the Hong Kong side would study the Benelux problem with care and sympathy but stressed that consideration could only be given to it within the context of Hong Kong's rights and obligations under the General Agreement on Tariffs and Trade.
5.
Mme. de Clercq then tabled statistics regarding Benelux production, imports and consumption of umbrellas for the years 1963 to 1966 and the first four months of 1967. (Mme. de Clercq's statistics are attached at Appendix A.) She stated that despite increased sales efforts domestic production, after rising from 1963-5, had stagnated. Consumption had been increased by extensive and expensive advertising, but the increase had been mostly met by imports, which had overtaken domestic production in volume between 1965 and 1966. Imports from Hong Kong had risen from 177,000 pcs. in 1963 to 472,000 pcs. in 1966, while 261,000 pcs. had been imported from there in the first four months of 1967. The unit price of imports from Hong Kong was exceptionally low, and considerably below that of imports from Japan. The Benelux Governments were not prepared to see the domestic industry ruined. The Benelux authorities were, therefore, anxious to introduce arrangements with all low-cost suppliers whereby there would be a measure of protection for domestic producers.
6.
They were attempting to establish a breakdown of umbrella imports from Hong Kong by sex and age.
She enquired whether the Hong Kong authorities had any indication of production trends in Hong Kong or any views on the possibility of a production sharing agreement between the industries, whereby each would concentrate on one kind of umbrella. Mr. Verhagen drew particular attention to the comparison of prices and the considerable Hong Kong share of the total import market.
7.
Mr. Miller conceded that according to the statistics umbrella imports from Hong Kong from 1963 to 1966 had risen by some 300,000 pieces, but pointed out that domestic production had increased by over 500,000 pieces during the same period. Moreover, Hong Kong's actual share of the import market and of domestic consumption, ignoring the figures for 1967 which might be the result of seasonal factors, appeared to be decreasing. Unit prices admittedly seemed to be low, although these had risen, and he presumed that low prices rather than the volume of imports were the real problem.
8.
He added that, although there seemed to be some rough correlation between the Hong Kong export statistics and Benelux import statistics in terms of the pattern of trade, there were, nevertheless, substantial differences in actual volumes. He
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CONFIDENTIAL