Miss Lackey CRE 2
Page
Reference
CO Miss Elliott CRE 1
REVISED KNITWEAR SURMISSION AND DRAFT LETTER TO THE KNITTING ASSOCIATIONS
I have the following comments:
Original submission (Doc X on attached file)
Para 6
We wished to see an additional sentence referring to the possibility that BC knitwear exporters, rather than UK producere, might well *eap the benefits in this market of any restrictions on Asian
knitwear, particularly bearing in mind their growing tariff advantage over other suppliers.
New parae 7-11
Para 8,
Para 11
line 14 after "other sectors of industry" insert "(in particular, where import penetration is already appreciably higher than in knitwear)"
In this paragraph "they" sometimes seems to refer to Hong Kong exporters, and at other times to Hong Kong officials. And in general I see no purpose in arranging a further session with Hong Kong officials to ask them to use their restraining influence. CT have already spoken to Mr Jordan on this basis during his December visit. The UK Government have always taken the line that, unless formal restrictions have been negotiated, they have no power to control exports to a particular country. Each Hong Kong exporters (naturally) is working in his own interests; why should he exercise restraint to the benefit of rival exporters in Hong Kong, or even more seriously, in Taiwan, with whose lower wage rates Hong Kong finds it increasingly difficult to compete? There is also the point that, when "voluntary restraint" quotas are introduced in Hong Kong, export entitlement is allocated to individual firms on the basis of their performance in the recent past; so when quotas are in prospect, there is a positive incentive to each exporter to increase his sales, if possible.
In explaining these difficulties to us in similar circumstances in the past, Hong Kong officials have also made the point that Hong Kong goods were only exported in response to UK orders; if the UK was so worried, why wasn't she asking the UK importers rather than the Hong Kong exporters to exercise restraint?
I should prefer to delete the second sentence onwards of para ll, and replace by "It is not yet possible to assess the effect this knowledge is having on their sales to this country, but the fasibility of an increase can not be ruled out. Hong Kong officials have been warned that we are watching the situation closely, and have been asked to supply us regularly with knitwear export statistica (thus giving us advance warning of arrivals in this country). We do not consider that any further action vis-à-vis Hong Kong would be appropriate at this stage".
10285 D 216882 30M 12 72 TP Gp 618
1