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the Colony is free to speak for itself and in its own interests in the Cotton Textiles Committee, although its
representatives sit as members of the U.K. delegation.
The L.T.A. was renewed in 1965 and discussions on its renewal
after September next year were initiated in the meeting of the
Cotton Textiles Committee in Geneva on the 8-10th October.
6.
Cotton is tending to go out of fashion in the face of
increasing competition from synthetic and man-made fibres and
from blends of cotton with these artificial fibres. The
increasing trade in the latter has led to pressure for
quantitative restrictions similar to those for cotton textiles;
the Americans, for example, have recently been canvassing an L.T.A.-type agreement to cover non-cotton textiles.
and,
7. Hong Kong (and some other low-cost producers) have been meeting this pressure by consultation under Article XXII of the GATT with those countries claiming that its exports of
non-cotton textiles are injuring their domestic industries;
where satisfied that a case has been made out, has met the
difficulty by undertaking to exercise voluntary restraint of exports at an agreed level. Such undertakings have been given to Germany, Canada, Sweden and Norway. The undertaking to Germany has lapsed (with German agreement); the other undertakings are still in force after annual renewal. Hong Kong sees its interests as best served by entering into these arrangements when pressure is strong; by willingness to accommodate as a reasonable trading partner and by negotiation, Hong Kong considers that it gets better terms than it would if countries were forced to take Article XIX action and imposed
arbitrary import controls.
8. Such voluntary restraints have been seen by the Board of Trade as contrary to U.K. interests. One section (the Industries Division) sees them as a form of "creeping
bilateralism" which will lead to the insidious spread of
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/quantitive