$230
CONFIDENTIAL
21 JUL 1969
CR ETC 294/6/2
TEXTAB M/18/69
MEMORANDUM FOR THE TEXTILES ADVISORY BOARD
British Textile Council Report on U.K. Cotton and Allied Textile Industry
Introduction
411/37600
1/3
The Department first reported, and gave preliminary views, on the Textile Council Report in TEXTAB Inf/1/69 dated
12th April, 1969. Since then Members have also had the opportunity of discussing the matter in an informal meeting on 16th April with Mr. Daniel Jones, M.P., Parliamentary Private Secretary to the President of the Board of Trade.
2.
At the sixth meeting of the Board, the Chairman asked Members whether they could ascertain informally from their trade and industrial associations the trade's general assessment of the likely effects of a 15% tariff on Hong Kong's cotton textile exports to U.K., on the assumption that imports from EFTA countries would remain duty free and that all quantitative restrictions were removed. He also indicated that the Department would be preparing a paper on the subject.
.3.
This Memorandum, which is the paper in question, sets out for Members' consideration the various consequences which might flow from the implementation of the Textile Council's proposals and the likely effects on Hong Kong's cotton textile exports to the U.K. on the following assumptions :
(a)
(b)
(c)
(a)
a tariff of 85% of the full MF rate (about 15%) is imposed on Commonwealth cotton textiles;
quotas are removed but not before costs in the British industry have been reduced to the levels assumed in the Report (i.e. by around 15-20%) by rationalisation, more three shift working, new investment and longer runs;
EFTA 12 Irish supp rs ret.'n'duty free entry;
if imports increase to any significant extent, either overall or in certain categories, use will be made of Article 3 of the C.T.A. to re- impose quotas and
(e)
firmer action will be taken against dumping and subsidisation.
Possible Effects on the Main Sectors of the Hong Kong Indus try
4.
The following paragraphs attempt to assess the likely effects of the above changes on exports to the U.K. of the various sectors of the Hong Kong cotton textile industry. The table below shows the relative importance of the British market for each of the sectors concerned as well as the importance of each sector in exports to Britain and in overall exports.
/Sector
CONFIDENTIAL