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4. YOUR PARAGRAPH 4. IN OUR VIEW THE PRINCIPLE OF CROSS-SWING ALREADY
EXISTS IN GROUPS 11 AND HII BY VIRTUE OF THE FACT THAT THE TOTAL
OF ALL CATEGORY CEILINGS EXCEEDS THE GROUP CEILING IN EACH CASE.
THIS ENABLES HONGKONG EXPORTERS TO CHOOSE WHICH CATEGORIES SHOULD
BE FULLY USED AND WHICH UNDER-USED. ANY FURTHER GENERAL PROVISION
FOR 10% SWING WITHIN THESE GROUPS WOULD EXPOSE THE MOST SENSITIVE
CATEGORIES WITHIN THESE CROUPS TO SIGNIFICANT INCREASES IN
ENTITLEMENT. WE REGRET THAT WE CANNOT THEREFORE AGREE TO SUCH A
GENERAL SWING FACILITY AND ANY PROPOSALS FOR MODIFICATIONS IN THESE
GROUPS WOULD HAVE TO PRESERVE THE PRESENT POSITION IN THE MOST
SENSITIVE CATEGORIES.
5. WE ESTIMATE THAT, EVEN TAKING ACCOUNT OF OUR PROPOSAL THAT
THERE SHOULD BE AGREEMENT ON FACTORS FOR SOME SCALING DOWN OF THE
ENTITLEMENT TRANSFERRED FROM GROUP 111 INTO GROUP IV (WHICH IS
NECESSARY TO US IF THIS AGREEMENT IS TO BE DEFENDED IN BROAD TERMS BOTH IN LANCASHIRE AND OVERSEAS), THE OVERALL EFFECT OF AN AGREEMENT
WITHIN THESE PRINCIPLES WOULD STILL RESULT IN ENTITLEMENT FROM
RELATIVELY CHEAP CATEGORIES OF FINISHED CLOTH BEING TRANSFERRED INTO
THE MOST EXPENSIVE CATEGORIES OF MADE-UPS.
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