000323/
G.F. 23
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·3
(ii)
(iii)
(iv)
the quota levels were small when compared with French exports to Hong Kong and total French imports of the items affected;
there clearly was a potential for increased imports from Hong Kong as evidenced from the number of applications for licences that were in excess of the amounts available for distribution;
the items still subject to quota control comprised about 60% of Hong Kong's global domestic exports.
The French side could not accept all of Mr. Miller's observations. They pointed out that this year's proposals were almost the same as last year's with the difference that the base was now smaller and the French economy weaker. They warned that Hong Kong could not expect to receive the same absolute liberalisation in future years as they had in the past, once the hard-core restrictions were reached. They stated that over two-thirds of Hong Kong's trade with France was now liberalised; therefore, Hong Kong now had good prospects of expanding exports to France. They then tabled figures for utilisation of quotas up to November 1967 which showed much higher performance than in 1966, 51% of the total licences issued as opposed to only about 17% in 1966. In two items, torches and toys, there was an excess of imports against licences issued of 9% and 41% respectively. Full details are at enclosure 2.
Conclusions
7.
With the exceptions of torches and batteries (for which the Japanese have a voluntary restraint agreement) the French intentions appear to be to free Hong Kong's trade to the same extent as that of Japan and East European countries and to agree similar percentage increases in the items remaining deliberalised. The pace of liberalisation may be slow but the list continues to be whittled down until there are now only four restrictions of practical as opposed to doctrinal importance to Hong Kong (knitwear, other than cotton, garments, other than cotton, radios and toys). The liberalisation of cameras and imitation jewellery and some of this year's increases in quota, offer useful opportunities for increasing our trade with France, which we cannot claim are altogether frustrated by the French licensing system, more especially is the volume of liberalised trade is not great.
Administration of the Quotas
8.
The French Government should publicise the invitation for importers to submit applications for licences in respect of those items under quota without undue delay. They have agreed once more to make lists of successful applicants available to the Department on a confidential basis.
9.
Members are invited to note the results of the Talks
in respect of quotas for 1968.
Commerce and Industry Department,
24th January, 1968.
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