INDUSTRY AND TRADE
79
In America, at the beginning of the year, the United States Tariff Commission began its investigation into the advisability of imposing an equalization fee on the raw cotton content in all cotton textile imports to offset the subsidy granted to American growers to promote export sales of raw cotton. Hong Kong's interests were watched over by a prominent firm of attorneys in the United States briefed by the Hong Kong General Chamber of Commerce and the Federation of Hong Kong Industries to offer evidence on their behalf. The Deputy Director of Commerce and Industry, accompanied by a representative of the Hong Kong Cotton Spinners' Association and one from the Federation of Hong Kong Weavers, flew to Washington in February to attend the hear- ings and act as advisers to the attorneys. In the event, the Tariff Commission advised in September against the adoption of an equalization fee.
Meanwhile fears lest the equalization fee might be imposed had caused United States buyers to speed up their import programme toward the end of 1961. They requested that deliveries of piece- goods and, to some extent, of garments should be brought for- ward and heavy shipments took place in the early months of the year. On 2nd March the United States Government, without notice and without providing detailed evidence of disruption, requested the Colony to restrain with immediate effect exports under eight of the categories of textiles listed in the Short Term Arrangement. Immediate suspension of exports would have created serious hardship and dislocation and to mitigate this the Hong Kong Government decided to permit__shipments up to the end of March. The US Customs then banned the entry of goods in these categories for consumption in the United States, shipped after 2nd March. A further request for restraint on seven additional categories followed on 19th March. As this action seemed likely to result in widespread disruption of the local textile industry with financial loss and the redundancy of several thousand workers, and as it seemed from the Colony's viewpoint to be at variance with the Short Term Arrangement, the Director of Commerce and Industry, accompanied by an Assistant Director, flew to Washington for talks with the United States Government on 23rd March.
The objects of this visit were to clarify the situation, to discuss the restraint levels requested and to try to find mutually acceptable