+
B
Does this take accout of the Jack
ttaut
other exporters will face
the same berriers.?
MW
UK TEXTILE POLICY - CONSULTATIONS WITH HONG KONG
At the third session of consultations with Hong Kong Government officials on 24 November 1970, the Governor raised the question of the application of the new tariff on imports of Commonwealth cotton textiles in the UK. He proposed that the decision to impose the tariff should be reconsidered and perhaps put off until 1973 when it should be known whether Britain was definitely entering the EEC. The Govenor was told that the UK had not expected to enter into full consultations on this matter at the meeting, but these could be held later if so reques- lted by Hong Kong.
2.
In his saving despatch No.237 of 24 February 1970 the Governor stated that an Advisory Committee had been set up by the Hong Kong Textiles Advisory Board to assess the likely effects of the imposition of the tariff on Hong Kong's cotton textiles exports to Britain. This Committee has now reported and, as a result of the survey it carried out on manufacturers and exporters in Hong Kong covering 416 companies, it found that some 27,000 workers in 294 of these companies manufacture textiles for the UK market. In view of the reduction in profit margins occasioned by imports from Hong Kong having to pay the import duty, it is estimated by the Committee that, while the cotton spinning sector could continue to export yarn to Britain at a profit of about 21⁄2 per cent on cost, the cotton weaving, made-ups and woven garments sectors could only sell at under cost and would therefore lose the trade with Britain altogether, with an adverse effect on employment in Hong Kong.
3.
Hong Kong also believe that if Britain joins the EEC, the Community will insist on the application of the Common Commercial Policy on cotton textiles which will involve quota restrictions and that it may well be that Britain will find it necessary to impose new quota restrictions as well as the tariff before the EEC's Common Commercial Policy is applied. Hong Kong therefore would like to have the implementation of the tariff postponed until the outcome of Britain's application to join the EEC is
known.
4. The Hong Kong Government officials were told at the consulta- tions in November 1970 that the present Government had reaffired the previous Government's policy and it also accepted the imple- mentation date of 1 January 1972 for the tariff on cotton textiles It is unlikely that any change in this decision could be made to assist Hong Kong, especially as the tariff affects also imports from other Commonwealth countries who would naturally expect any delay in imposition of the tariff to be applied to them also.
Hong Kong Department January 1971