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Kong, while the substantial drop in fabric imports which accounts for the bulk of Hong Kong's textile exports to Ireland was played down. From the table at enclosure (2), it can be seen that the decline in fabrics was such that, according to published O.E.C.D. statistics, Irish textile imports from Hong Kong declined by 49% during 1967 compared with 1966. Although more recent Hong Kong exports statistics (enclosure (3)) indicate that the trade is picking up again (mainly in synthetic fabrics), the trade as a whole is still running below 1965 and 1966 levels. The Irish Government attributed the cause of the decline to Hong Kong's non-competitiveness in a free-for-all quota system. If this is the case, then there is surely less ground to include Hong Kong on the quota list now than there was two years ago as, presumably, we pose a lesser threat.
7.
The main points made in the Irish aide-memoire were
(a) they could not reconcile Hong Kong export and Irish
import statistics and suggested Irish imports via Britain might be responsible;
(b) imports of yarn and made-up textiles from Hong Kong
increased substantially from 1966 to 1968;
(c) the reduction in Irish imports of piecegoods from
Hong Kong, was not a result of the quota "which does not operate in a restrictive way". Duty free quota licences for piecegoods were issued irrespective of whether the quota was exhausted and virtually all imports against quota were duty free;
A
8.
(a)
(e)
other G.A.T.T. countries controlled imports of low- cost textiles from certain areas including Hong Kong;
imports of restricted items from Hong Kong were not less favourably treated than those from other restricted suppliers.
We suggest that the following comments on these five points might be appropriate for the Anglo-Irish Economic Committee -
9.
As regards (a): The O.E.C.D. statistics at enclosure 2 show that the bulk of Irish fabric imports from Hong Kong are cotton. Hong Kong exports of cotton fabrics to Britain are subject to export quota and we have no evidence of re-export of Hong Kong cloth to Ireland. Such re-exports would entitle imports to replacements as the fabrics concerned would not have been consumed in Britain.
10.
As regards (b): While the Irish Government point to the increase in imports of yarns and made-ups from Hong Kong, they ignore the much greater decline in imports of fabrics evident from the O.E.C.D. statistics.
11.
As regards (c): The implications of the last two sentences of paragraph 2 of the latest Irish aide memoire seems to be that the duty free imports are for consumption in Ireland as well as for subsequent re-export. This appears to make nonsense of quota restrictions.