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.F. 323
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illustrated his point by quoting the following figures
Hong Kong
Export Statistics
Benelux
Import
Statistics
(pcs.)
(pcs.)
1964
289,000
187,000
1965
474,000
280,000
1966
472,000
279,000
Jan./April, 1967
261,000
158,000
He thought it unlikely that the difference could be explained by third country imports and thought there would have to be some examination of the composition of the trade and the origin of exports. As regards the composition of the trade, he pointed out that Hong Kong umbrellas of cotton cloth, plastic sheeting and rayon of whatever size (except perhaps toy umbrellas) were classi- fied under one item in the Hong Kong trade statistics. Total exports for 1966 were valued at $21 million. U.S.A., Germany, Thailand, United Kingdom and Italy were the principal importers. As far as Hong Kong production were concerned, there were some 47 factories with 1,000 workers making umbrellas, while 13 other factories, employing 340 persons, made parts for umbrellas. He had no knowledge of the industry's plans nor of the division of production between adults and children's sizes.
9.
On the question of origin, he had ascertained that no re-exports were recorded in the Hong Kong trade statistics, although he himself believed that some re-export trade took place. He noted that the Benelux authorities did not require certificates of origin for umbrellas, so there had been no reason to investigate the trade. It was entirely possible that assembly of umbrellas was taking place in Hong Kong and that the products were subsequently declared as domestic exports; although they would not meet the department's criteria for Hong Kong origin. He noted that there was some differ- ence in practice between the Benelux Governments regarding recognition of the various issuing authorities and added that, should the Benelux authorities initially decide to recognise only those certi- ficates issued by the Department of Commerce and Industry, the Hong Kong Government would feel obliged to request recognition of the other authorities as well, although accepting the Benelux preroga- tive in this respect.
10.
The Hong Kong industry was not organised with a represen- tative and authoritative body to speak for it like the cotton textiles industry. He, therefore, doubted whether an industry to industry production sharing agreement would be feasible, although the department could arrange for introductions to individual factories.
11.
Mr. Verhagen admitted that the increase in imports from Hong Kong was lower than the increase in domestic production, but pointed out that the increase in these imports was nevertheless very substantial. Although imports from Hong Kong had declined in relation to apparent consumption in 1966, he was alarmed by the trend revealed in the first four months of 1967, especially when the volume of applications for import licences for the rest of 1967 was taken into consideration. He observed that the Benelux import statistics were based on a "port of consignment" ("on provenance de") basis and speculated on the possibility that some Benelux imports registered as coming from Hong Kong might in fact have been of other than Hong Kong origin.
/12.
CONFIDENTIAL