Our reference: Your reference:
CRF.13514/3/G 15/11
BOARD OF TRADE
Commercial Relations and Exports Department
1 Victoria Street, London S.W.1
27366 Telex: 25955 Answer Back: BOTHQ LONDON
Telegrams: Advantage London S.W.1 Telephone: 01-222 7877, ext. 2273
RESTRICTED
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129
13th August, 1969.
Dear Mr. Rounthwaite,
Before he went on leave last week, John Gowers asked me to reply to your letter of 30th July. He was sorry that owing to a couple of administrative errors you did not receive the guidance telegrams on the cotton textile announcement, but I understand. that these have now been sent to you (not, I am afraid, on the Trade Commissioner's private link but through the Governor's office).
We have put your point about Portugal to Industries Division, who accept that imports from EFTA countries may increase, but point out that our trade with these countries accounts for only a small proportion of our total imports. In Industries Division's view, it is unlikely that any of the EFTA countries would want to expand their production to the extent which would be required to enable them to take over a large part of the trade supplied by the developing countries of the Commonwealth. In the case of Portugal, production has been static for several years and, indeed, steps were taken by the Portuguese Government early this year to restrict new investment in the industry. Industries Division go on to say that, according to their best estimates, any increase in imports from Portugal would not be at Hong Kong's expense; indeed, the Colony will probably stand to gain from the new arrangements, since with the, removal of categorised quotas she will be able to "trade up" increasingly into garments and other made-ups.
Should the question of imports of cotton textiles into the U.K. from the Irish Republic be raised with you, you might like to be aware of the following note, also from Industries Division:-
!
"Although wage levels in the Republic are lower than the U.K.,
they are not of course comparable with Portuguese or Hong Kong rates. There will be no change in the situation that cloth and made-ups wholly produced in the Republic will be duty and quota free (but yarn, at present subject to quota, will be liberalised). Cloth and made-ups containing yarn or cloth from one of our "restricted" countries is at present subject to quota; these controls will be removed, presumably at the end of 1971, but it will be necessary to work out pew origin rules for duty-free trade after 1st January, 1972. For example, it is extremely unlikely that Hong Kong aloth made into garments in the Iriish Republic would in future qualify for duty-free
D. C. Rounthwaite, Esq., British Trade Commission, Hong Kong.
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