CONFIDENTIAL
HONG KONG AND THE MULTI-FIBRE ARRANGEMENT
Comments on the Governor of Hong Kong's letter of 3 September to Mr Murray and the enclosed memorandum
GOVERNOR'S LETTER
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1. The point about the effect which a cut-back in Hong Kong's exports to the Community would have on Hong Kong's textiles trade with other countries seems valid. It seems particularly clear that there would be implications for the new agreement that Hong Kong has concluded with the United States (see paragraph 4 of the Summary of the Memorandum and paragraph 3 of the detailed memorandum).
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2.
It is arguable whether a cut-back in Hong Kong's exports to the Community,
and by extension to other countries, would be blamed on the UK alone. Hong Kong might expect the UK to do its best within the Community to protect Hong Kong's interests but if those interests were to be adversely affected it seems more likely that the resentment in Hong Kong would be directed at the Community as a whole and, more particularly, the major importers of Hong Kong's textiles. The unilateral restrictions that the French Government imposed in the summer should make it evident that there is no one particular member of the Community which is concerned to restrict access to Community markets.
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3. The reference to "wild and very damaging ideas in the Commission" is inexplicable. The Commission, with the backing of Member States, are seeking to restrict imports from Hong Kong and the other "super competitor" textile supplier countries in order to protect the domestic textile industries in Member countries and to allow greater access to the less developed among the developing countries. It is understandable that Hong Kong should disapprove of this approach but it is not an irrational one.
SUMMARY OF THE MEMORANDUM
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4.
1
It is stated that the cut-back in textile imports from Hong Kong that the Commission are proposing for 1978 compared with 1976 would put 10,000 people out of work and that the loss of job opportunities resulting from the loss of export potential could be as high as 24,000. In considering these figures it should be remembered that the Commission have estimated that Member States have already lost 500,000 jobs (15%) in their textile industries between 1973 and 1976, the duration of the present MFA, and would lose a further 1,600,000 jobs if the MFA was renewed in its present form.
/5. Mention