from the current shortage of labour.
It is now a fact not generally
realised that Hong Kong is no longer a particularly low cost country.
13. Furthermore, the United Kingdom has for years imported from Hong Kong
at duty free rates with no quantitative limitation.
Yet, apart from the
special sector of cottun textiles (which is in any case covered by the GATT
Long Term Arrangement), there has been no apparent market disruption. Indeed,
the U.K. now exports more to Hong Kong than she imports from her (as does
also the EC); and the share of the U.K. market in Hong Kon ̧'s exports has
been steadily falling from about 20% in the early 60s to less than 12_% in
1969.
14. Next, there is the limitation on the growth of Hong Kong's exports
provided by capacity and labour. With a population of only 4 million people
there is a limit to Hong Kong's penetration of the European market, especially
¿iven her present very large market in the United States. In the last two or
three years the demand for Hong Kong products has exceeded the supply with
the result that a large part of the increase in the value of Hong Kong's
exports in this period has been due to rising prices rather than rising
volume.
15. Finally, there is the point which has been emphasised at length above
that, if Hong Kong is pushed out of markets by discriminatory action, her
competitors will very soon fill the vacuum. Countries like Taiwan, South
Korea, Singapore and others have shown their ability tɔ increase manufacturing
output at a rapid rate and they all possess large reserves of labour, an
advantage which dong Kong has now lost.
16. This memorandum has attempted to prove that it would be to the advantage
of Europe, and not just to the advantage of Hong Kong, for Hong Kong to be
included in the G.S.P. by all major donor countries, but especially the
United States. The key to this proposition clearly lies in the very large
market for Hong Kong products provided by the United States. One element
in the U.S. scheme, however, is that it excluies, inter alia, textiles and
footwear. The same is true of the existing U.K. scheme in respect of
textiles. The C, however, hee included textiles in its offer within duty-
/free quotas.
tyسلام
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