XN000022-1972-10-31 — Page 2

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Tuesday, October 31, 1972

Mr. Jordan said that an important feature of the agreement had been

the recognition by both sides of the fact that cotton and polyester/cotton

in other words they goods were often acceptable substitutes for each other:

tend to serve the same consumer market.

This principle had been translated into practice by combining the

restraints on polyester/cotton with those which currently apply to exports of

cotton textiles to the United Kingdom. As a result of this Hong Kong's total

quota for 1973 for restrained textiles (i.e. cotton and polyester/cotton) had

been increased to approximately 277 million square yards, with various sub-limits

on certain categories within this overall amount.

"In theory," Mr. Jordan said, "this would mean that we could ship

all 277 million square yards as either cotton or polyester/cotton in 1973.

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"However, in view of the particular difficulties of the United Kingdom

industry at the present time, and after some pretty hard bargaining in which

of course the advice of our Textiles Advisory Board was especially valuable

we agreed that we would not ship up to the limits exclusively in either cotton

or polyester/cotton.

"These limitations are expressed as sub-limits on cotton and polyester/

cotton within the aggregate 277 million square yards and as a result of their

application we can ship up to 250 million square yards of cotton and up to

90 million square yards of polyester/cotton in 1973," he said.

Mr. Jordan pointed out that 250 million square yards of cotton represented

a 50 million square yards increase on the present cotton quota limits, while

the 90 million square yards of polyester/cotton which is available, roughly

equates with Hong Kong's exports in the year ending immediately before the start

of the new restraints.

/However,