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He appreciated that Hong Kong only wished to discuss (i) and (ii) but he hoped that Mr. Jordan could see his way to include (iii) as well. If that were not possible, he saw difficulty knowing in how to proceed.
10.
Mr. Jordan stated that a reduction in employment in itself was not sufficient argument for the protection of the Swedish textile industry. He observed that, in general, the textile industry was tending to become more capital intensive and less labour intensive. Thus a reduction of labour force was inevitable if the textile industry was to remain competitive, and productivity was to improve. The reduction in employment in the textile industry also enabled the faster growing sectors of the Swedish economy to obtain the labour they needed. Commenting on the trade figures mentioned by Baron de Geer, Mr. Jordan said that Hong Kong could not be held responsible for the decline of Swedish exports as it had no tariffs or import restrictions. The deficit in the visible trade was also not of over- riding importance because of the items he had mentioned earlier in addition there were also invisibles. Finally, to trading partners like Hong Kong and Sweden, it was the multilateral overall balance which mattered. Mr. Jordan further observed that the high per capita textile imports by Sweden was not the result of any conscious determination. It was only the result of the normal development of trade. He pointed out that the Swedish domestic demand for textile products was high and if imports were to be cut down, the Swedish industry would not be able to meet the demand. Thus restrictions on the import of Hong Kong products would merely shift the demand to other suppliers.
11.
Dealing with the question of how to proceed, Mr. Jordan stated that as far as the outcome was concerned, Hong Kong would find difficulty in extensions in scope of non-cotton items. He hoped to be able to conclude agreements with the Swedish delegation on extensions in time, and then proceed to see how strong a case could be made for any other items.
12.
In answer to a question by Baron de Geer, Mr. Jordan stated that any request for the conversion of an E/A scheme to restraint, would be an extension of scope. He added that in any case the Swedish Note did not ask for restraints in 1969/70 for the three existing non- cotton E/A items and he had no instructions in the matter.
13.
Mr. Jordan then proposed that it would be best for the two teams to look at the figures first and then discuss together. Baron de Geer agreed and suggested calling in the Industrial Advisers. This procedure was agreed and it was decided that the Statistical Sub-Committee should commence with the examination of the cotton items.
14.
The meeting then adjourned at 12.30 p.m.
/Second Session
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