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Please send one
each to: -
Lender, Hong Kong Dolegationi
2.1, October
CE
Mr. Chairman,
10
1977. Brussels
373
I promised to make a detailed response to the proposals which you gave us and I am now in a position to do so. It was difficult to know where to begin, but I decided that it would be of assistance to both sides if I proceeded:
HKK 121 616/1
3. Stern FID/F Fro
J.A. B. Stewart Psy OBE
Flo Hong Kong Dept
Miss A. Macfarlane, CREID.
D.T
PR2Yx
2 - C
(a) first, to examine the concepta which
we understand are behind your pro- posals;...
(b) eecondly, to explain the effects which
those concepts would give rise to as far as HK is concerned;
(o) thirdly, to comment on the justi-
..
fication for the particular restraints you have asked for; and
(a) fourthly, to tell you which parts of
your proposals could be accepted by
HK and which parts could not, and why parts are acceptable and why parta are not.
First, then the concepts. During the
Textiles Committee Meeting in July 1977, you referred to "the necessity for stabilisation on rates of penetration in certain products" and stated that "for products with a very high rate of market penetration, it is essential that the rate of
2 ponotration of imports by comparison with 1976
hy Quaiswill. Mie yenotation with 1976
I & in Thompson
I think tuut- this comes from
Dennis Bray.
It is a brilliant
piece of advocal
of
levels be stabilised".
3.
This suggests that the rate of market penetration by imports is the ultimate measure of the state of importing countries 'industry,
We believe this statement to be untrue end the arguments to support it invalid. The viability of domestic producers can be measured only by its total production, sales and profits both for
napoliciting
but untant mutely the actio consumption and for overseas markets. Commissim are and not judges,