CONFIDENTIAL
16. The Canadian Department of National Revenue has recently
revised its levels of customs valuations on Hong Kong textile imports, largely as a result of domestic textile manufacturers' pressure. The Hong Kong exporters and the Canadian importers have both retained lawyers to contest the extent of the revaluation, and at present the problem is largely in their hands.
17. Hong Kong has an agreement which expires at the end of September with Canada restraining the exports of certain items of clothing made from polyester/cotton and from 100% polyester fibres. Hong Kong has now agreed to talks in July to discuss future levels. The Canadians have also asked all low-cost exporters, including Hong Kong, who restrain the export of polyester/cotton shirts to limit polyester/polynosic shirts
within the restraint level for the former.
Preferences for Developing Countries
18. Developed members of OECD agreed to do their best to table illustrative lists of the products on which they were prepared to grant preferences to developing countries on 1 March with the aim of agreeing by the end of June on the terms of an offer to
developing countries, list while the new Administration is forming its trade policies. As a result discussions between OECD countries have not started and
the time-table is slipping. The EEC have tabled their offer for manufactures and semi-manufactures on the basis of duty free quotas and the UK is considering whether her offer should be modified so
that it falls into line with EEC's.
The Americans have failed to table their
19. Hong Kong's greatest fear is that being so competitive she should not be treated as a "developing country". It is not so likely that there will be any direct challenge to her developing status as that a number of donor countries will, in some other form, discriminate against her so that her trading position suffers some sort of erosion.
20.
It would be best, if this subject is raised, to say only that the UK will certainly take the interests of Commonwealth countries into close account but that it is impossible to foresee how matters will work out until all developed countries have tabled their offers and discussions between them have been completed.
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