CONFIDENTIAL
Hong Kong Exports
Textiles are Hong Kong's major industry, accounting in 1969
for 47% of all Hong Kong exports. The regulation of
international trade in textiles is a matter, therefore, of great
importance to Hong Kong. The other main items exported by
Hong Kong are electrical goods 10%, plastic toys 7%, wigs 6%,
transistor radios 4% and artificial flowers 3.
Cotton Textiles
2. Towards the end of the '50s imports of cotton textiles from Hong Kong (which enter the United Kingdom free of duty) began
to cause serious problems for our domestic industry. To deal
with the situation, inter-industry agreemen's were drawn up
providing for the development of Hong Kong's trade with the United Kingdom in a reasonable and orderly manner, having regard
to the need to avoid disruptive effects in the United Kingdom
market and on individual lines of production in both the United
Kingdom and Hong Kong. These arrangements (the "Lancashire Agreement") were later embodied in an inter-governmental
agreement known as the "Heads of Agreement”. Thus, since 1959
imports from Hong Kong of woven cotton textiles (including cotton clothing) have been subject to quantitative restrictions
in the United Kingdom market and since then imports from all
other developing countries have been brought under control.
Besides Hong Kong, India has a bilateral quota and there is
also a global quota for all other developing (i.e. low cost)
producers (apart from Portugal); there are no quantitative
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CONFIDENTIAL