CONFIDENTIAL
Is it worth while running this sort of risk simply in order `-
to protect a declining industry?
8. The Hong Kong textile fuänetry would undoubtedly question
some of the Textile Council's conclusions in their application
to Hong Kong, The tarifP on the devoloping Conncnwealth
countries, with continued Free entry for EFSA countries and
the Irish Republie, could be miereprosented there and ugod
for Communist propagands. As regarão Hong Kong's exporta
to this country, the volume of yarn and fabrics would probably
fall, but exports of garments might increase (though at a
lover preco) with the removal of the quota, Hong Kong's mein
foar is likely to be that as the result of increasing her
garment exports she might later be accused of threatening
disruption to the market and find herself subject to both the
tariff and quota restraint,
9. A further potat, affecting India and Pakistan, is that
the removal of the existing preference margin for raw atton
yarn and cloth originating from Commonwealth countries could
lead Hong Kong to stop buying its raw materials from India
and Pakistan.
10.
Cortada Commonwealth countries have contractual rights
Por duty free entry for their exports to this countsy›
(paragraph 15 of the President's papon). Negotiations for
a waiver of duty-froc eights would be extrozoly difficult
and a high cost might have to be paid as the only practicablo
altezzative to dropping the tart62 proposal.
COME ZEMREKAL