WEDNESDAY, DECEMBER 7, 1977
DETAILS OF NEW HK-EEC TEXTILES AGREEMENT RELEASED
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THE TRADE, INDUSTRY AND CUSTOMS DEPARTMENT TODAY RELEASED DETAILS OF THE NEW TEXTILES AGREEMENT BETWEEN HONG KONG AND THE EUROPEAN ECONOMIC COMMUNITY.
A SPOKESMAN FOR THE DEPARTMENT SAID THAT THE TEXT
OF THE AGREEMENT, WHICH WAS INITIALLED IN BRUSSELS AT THE
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END OF LAST WEEK, WAS EXAMINED BY THE TEXTILES ADVISORY BOARD AT A MEETING HELD YESTERDAY (TUESDAY) AFTERNOON. THE BOARD ADVISED THAT, PENDING FORMAL RATIFICATION OF THE AGREEMENT, HONG KONG SHOULD IMPLEMENT ITS PROVISIONS ON A DE FACTO BASIS FROM JANUARY 1, 1978.
THE SPOKESMAN SAID THAT THE DEPARTMENT HAD ISSUED A NOTICE TO EXPORTERS EARLIER TODAY ADVISING THE TRADE OF DETAILS OF THE AGREEMENT AND CALLING FOR SHIPMENT RETURNS IN RESPECT OF ITEMS BEING BROUGHT UNDER RESTRAINT FOR THE FIRST TIME.
MEANWHILE, A GOVERNMENT SPOKESMAN SAID THAT IF THE NEW 1978 LIMITS FOR THE FOUR ITEMS WHICH HAVE FACED THE BIGGEST CUTBACK (COTTON FABRICS, WOVEN TROUSERS, WOVEN SHIRTS AND KNITTED BRIEFS) HAD BEEN APPLIED IN 1976, IT WOULD HAVE COST 8,500 JOBS AND ABOUT $390 MILLION IN EXPORT EARNINGS.
THE DAMAGING IMPACT OF THESE CUTS WILL NOT. HOWEVER BE FELT SO KEENLY IN THE SHORT TERM. THIS IS BECAUSE 1977 HAS BEEN A POOR YEAR FOR EXPORTS TO THE EEC, WITH TRADE IN THESE FOUR ITEMS RUNNING AT ABOUT THE MAXIMUM LEVEL IT WILL BE ALLOWED TO REACH IN 1978.
THIS DOES NOT MEAN, HOWEVER, THAT THE DAMAGE IS REMOVED. WHAT IS LOST, THE SPOKESMAN SAID, IS THE OPPORTUNITY FOR TRADE TO GROW AS THE MARKET RECOVERS, WHICH IT IS SHOWING SIGNS OF DOING, AND THEREFORE FOR JOB OPPORTUNITIES IN THESE SECTORS TO
INCREASE.
THIS APPLIES NOT ONLY TO THE CATEGORIES WHICH HAVE FACED THE MOST SEVERE CUTBACKS, BUT ALSO TO MOST OTHER MAJOR ITEMS IN CLOTHING EXPORTS TO THE EEC. LIMITS AND GROWTH RATES FOR THESE FROM 1978 ONWARDS ARE WELL BELOW THOSE TO WHICH HONG KONG COULD LEGITIMATELY HAVE ASPIRED UNDER THE RULES OF THE MULTI-FIBRE ARRANGEMENT.
AND, IT MUST BE REMEMBERED, THE EEC AGREEMENT RUNS FOR FIVE YEARS SO THE EFFECTS WILL BE OF LONG DURATION.
ALL IN ALL, THE SPOKESMAN SAID, THE DAMAGE IS SOMEWHAT LESS THAN WOULD HAVE BEEN THE CASE IF THE ORIGINAL EEC PROPOSALS HAD BEEN FORCED UPON US.
THE CONSEQUENCES IN TERMS OF THE GROWTH OF THE HONG KONG ECONOMY ARE DIFFICULT TO PREDICT. BUT IF OTHER MARKETS AND OTHER INDUSTRIES CANNOT COMPENSATE FOR THE LOSS IN GROWTH POTENTIAL IN SALES OF TEXTILES AND CLOTHING TO THE EEC, THE GROWTH IN OUR GROSS DOMESTIC PRODUCT WILL BE ADVERSELY AFFECTED.
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