0003230
G.F. 323
CONFIDENTIAL
· 2-
First Session - Part I (Plenary)
2:30 p.m.. Monday, 27th April. 1970
Mr. Ho welcomed the Swedish delegation to Hong Kong and exchanged the usual courtesies with Baron de Geer.
2
Commenting on the background to the present agreement, Mr. Ho pointed out that Hong Kong agreed to restraint in 1968 on the
Nevertheless, understanding that it was to be a temporary measure.
As
in 1969, Hong Kong agreed to an extension of restraints for another year and. to the inclusion of some extra items in the agreement because Swedish production in textiles was declining and the report of the Royal Commission on Swedish textile industry was still pending. regards the former, he was pleased to note from Swedish figures that in a number of cases the trend had been reversed; and as for the latter, he hoped the Swedish representatives would be able to report on the findings of the Royal Commission.
Mr. Ho
3.
said that the present meeting was opportune in the light of the Cotton Textiles Committee's resolution of 17th December, 1969; and that discussions of non-cotton items would have to be conducted with due consideration to the current international situation resulting from U.S. pressures for widespread restraints on non-cotton textiles.
4.
He pointed out that the C.T.C. resolution enjoined importing member countries maintaining bilateral agreements to offer increased import opportunities and to adopt a more liberal policy towards international trade with particular reference to developing countries. In this connection he noted that Swedish production during the past year had increased in certain sectors of the cotton textiles industry (particularly cotton knitwear and slacks) where Hong Kong's export performance had been relatively poor. Furthermore, there was a marked increase of exports to Sweden from a number of other suppliers, notably
Mr. Ho Finland, Macao, Denmark, Italy and in some items, the U.K. said that he understood several Swedish firms had set up subsidiary companies in Portugal and Finland manufacturing garments for exporting back to Sweden. He also understood that the Swedish Government had recently promulgated some measures to promote the textile industry and improve the competitiveness of Swedish products. Hong Kong would, therefore, hope to hear from the Swedish delegation that continued restraint against Hong Kong was not necessary.
5.
Mr. Ho said it was unreasonable to suggest that textiles imports from the so-called low-cost suppliers were damaging the Swedish industry since they supplied only 15-30% of total imports. If restraints on them were continued it would only assist other suppliers to gain a larger share of the market at their expense and not to the benefit of the Swedish industry.
6.
Turning to the request by the Swedish Government for suspension of export authorisations involving five statistical positions, Mr. Ho said that this action, taken only ten days before negotiation were due to start, was regrettable and would cause uncertainty and hardship in the trade. Moreover, the late supply of Swedish statistics for the five new items had made it difficult for Hong Kong to make a proper study of the Swedish case.
7.
Baron de Geer said that the Swedish textile industry was going through a difficult stage of re-adjustment and imports from low cost suppliers would increase the difficulty in this process of structural reform. Increased production costs in the
/textile
CONFIDENTIAL