-
· 9
WEDNESDAY, JANUARY 16, 1980
HK/USA TEXTILES RESTRAINT AGREEMENT MODIFIED
*****
AFTER MORE THAN SIX MONTHS OF CONSULTATIONS, HONG KONG HAS CONCEDED TO INSISTENT USA DEMANDS THAT THE TERMS OF THE CURRENT FIVE YEAR TEXTILES RESTRAINT AGREEMENT BETWEEN THEM BE MODIFIED DOWNWARDS FOR 1980.
THE ACTUAL TRADE EFFECTS OF THE REVISION ARE EXPECTED TO BE SLIGHT. BASIC LIMITS ARE UNAFFECTED AND THE MAIN REVISION AFFECTS ONLY THE SO-CALLED FLEXIBILITY PROVISIONS.
HONG KONG DIRECTOR OF TRADE INDUSTRY AND CUSTOMS, MR WILLIAM DORWARD, EXPLAINED WHY SUCH AN APPARENTLY MINOR CHANGE HAD TAKEN OVER SIX MONTHS TO BE SETTLED.
+APART FROM THE FACT THAT WHEN HONG KONG MAKES AN AGREEMENT WE BELIEVE IN LIVING UP TO IT, OUR MAIN CONCERN HERE WAS THAT THE USA WAS SEEKING TO ESTABLISH A PRECEDENT WHICH COULD BE VERY DAMAGING
IN FUTURE, HE SAID. WHY ELSE USE A SLEDGEHAMMER TO CRACK A WALNUT?+
FINAL AGREEMENT BY HONG KONG WAS MADE IN THE FACE OF A TAKE-IT- OR-LEAVE-IT PROPOSITION MADE THIS WEEK BY THE USA, THE EFFECTIVE ALTERNATIVE TO WHICH WAS NOTICE OF TERMINATION OF AN AGREEMENT WHICH STILL HAS NEARLY THREE YEARS TO RUN.
CHIEF HONG KONG NEGOTIATOR, MR PETER TSAO, EXPLAINED THAT THE SERIES OF CONSULTATIONS HAD BEGUN IN MID-1979 WITH A USA REQUEST TO HONG KONG FOR ASSISTANCE IN DEALING WITH A THEORETICAL PROBLEM OF 'SURGES'. THESE ARE SITUATIONS WHERE THE USA CONSIDERS THAT CHANGING MARKET CONDITIONS MIGHT MAKE IT POSSIBLE FOR IMPORTS TO RISE SUBSTANTIALLY IN SPITE OF AGREED RESTRICTIONS.
+WE EVENTUALLY REACHED AGREEMENT ON A FORMULA TO TAKE CARE OF THAT, MR TSAO SAID. +BUT AS TIME WENT ON IT BECAME CLEAR THAT THE USA OFFICIALS WERE IN FACT SET IN CUTTING BACK ON THE HONG KONG TRADE POTENTIAL TO WHICH THEY HAD AGREED LESS THAN TWO YEARS EARLIER.
HONG KONG OFFICIALS EXPRESS THEMSELVES BEWILDERED BY THE VEHEMENCE OF THE USA DEMANDS. IN TERMS OF THE USA MARKET, ONE SAID,+IT DOESN'T ADD UP TO A ROW OF BEANS. NO ONE COULD EXPLAIN TO US WHY THE CONCESSION HAD TO BE EXACTED, EXCEPT THAT THE REASON WAS POLITICAL.+
THIS IS BELIEVED TO REFER TO AN INTERPRETATION OF THE USA ADMINISTRATION'S COMMITMENT TO THE TEXTILE INDUSTRY CONTAINED IN A WHITE PAPER ISSUED IN FEBRUARY 1979.
+WE POINTED OUT ON MANY OCCASIONS THAT THIS INTERPRETATION WAS NOT CONSISTENT WITH INTERNATIONAL OBLIGATIONS THE USA HAD FREELY ACCEPTED, MR DOWARD SAID. AND THAT TO FORCE IT ON HONG KONG UNDER THREAT OF ACTION WHICH WOULD CAUSE CHAOS IN OUR MAJOR
INDUSTRY WOULD DAMAGE THE CREDIBILITY OF FUTURE AGREEMENTS BETWEEN UNEQUAL PARTNERS.+
HONG KONG IS UNIQUELY DEPENDENT ON ITS TEXTILE AND APPAREL TRADE. HALF ITS INDUSTRY AND WORKFORCE ARE IN THIS SECTOR AND A THIRD OF ITS EXPORTS GO TO THE UNITED STATES.
/10