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23.
He admitted that the unit price of Benelux umbrellas had been rising over the past few years. This had been occasioned not only by normal inflationary factors but also by means of a "wage explosion" which had increased the Benelux average wage by 70% over the last five years. Another
contributing factor he said, was the Benelux production was geared, in the main, for the ladies' fashion market where unit price were rather higher than those of utility styled umbrellas. He added that, because it aimed mainly at the fashion market, the Benelux industry was also obliged to spend large sums of money on advertising, which increased unit costs. But the consequent increase in consumption had been largely met by imports at very low prices.
24.
Mr. Verhagen said he would await with interest the results of the Hong Kong investigations into:-
(i)
and (ii)
the origin of umbrellas exported from Hong Kong to the Benelux;
the various categories of umbrellas involved in this trade.
The Benelux authorities for their part would continue their investigations into the composition of the trade and the question of certificates of origin. He added that he had no authority to request certificates of origin for Hong Kong umbrellas exported to the Benelux. This particular question, however, would receive priority in the Benelux investigations of the overall problem and their decision would be forwarded to the Hong Kong authorities as soon as possible. The Benelux authorities would also endeavour to spell out the case for market disruption, which was inherent in the data already supplied by the Benelux side.
25.
As regards the composition of the trade, the Benelux provisional figures showed that children's umbrellas accounted for about 30% of the total umbrella imports as against the Hong Kong figure of 10%. He thought that this difference might well be explained by exports declared as toys in Hong Kong but as umbrellas when imported into the Benelux. One reason for this could be that the Benelux import tariff for toys was higher than that for umbrellas.
26.
In conclusion, Mr. Verhagen said that the Benelux authorities would:-
(i) study the possibility of requiring
certificates of origin for Hong Kong umbrellas;
and (ii) investigate the Benelux position further in
the light of the Hong Kong figures and statements.
It was the Benelux authorities' contention that umbrella imports from Hong Kong were causing disruption although Hong Kong could not at present agree. The Benelux authorities would, therefore, let Hong Kong know in due course when they wished to resume the consultations. Meanwhile, he wondered when it would be possible for the Benelux authorities to be given the results
/of the
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