XN000022-1976-07-07 — Page 4

WEDNESDAY, JULY 7, 1976

RESTRICTIONS ON HK TEXTILE EXPORTS TO AUSTRALIA UNDER REVIEW

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THE HONG KONG GOVERNMENT IS CLOSELY REVIEWING THE SITUATION ON TEXTILE EXPORTS TO AUSTRALIA, WITH PARTICULAR REGARD TO ITS RIGHTS, AND AUSTRALIA'S OBLIGATIONS, UNDER THE ARRANGEMENT REGARDING INTERNATIONAL TRADE IN TEXTILES, THE ACTING DIRECTOR OF COMMERCE AND INDUSTRY, THE HON. BILL DORWARD, TOLD THE LEGISLATIVE COUNCIL TODAY.

+THE AUSTRALIAN GOVERNMENT HAS EXPRESSED ITS INTENTION TO SEEK RECOURSE TO THE PROVISIONS OF THAT ARRANGEMENT WHEREVER THIS IS FEASIBLE, AND THE HONG KONG GOVERNMENT WILL, AS IS ITS PRACTICE, RESPOND PROMPTLY AND CONSTRUCTIVELY TO ANY APPROACH THE AUSTRALIAN AUTHORITIES MAY TAKE IN THIS CONTEXT, HE SAID, IN REPLY TO A QUESTION BY THE HON. FRANCIS TIEN.

HE RECALLED THAT THE AUSTRALIAN GOVERNMENT HAD, SINCE DECEMBER 1974, INTRODUCED A SERIES OF RESTRICTIVE MEASURES IN THE FORM OF TARIFF QUOTAS AGAINST TEXTILE IMPORTS.

+THE TARIFF QUOTAS FOR 1976, WHICH HAVE RECENTLY BEEN ANNOUNCED, REPRESENT A SUBSTANTIAL INCREASE OVER 1975 LEVELS, ALTHOUGH IN A NUMBER OF CASES THEY REMAIN STILL WELL BELOW ACTUAL TRADE FIGURES FOR 1973/74,+ MR. DORWARD SAID.

HOWEVER, THE POSSIBILITY OF A SUBSTANTIAL RECOVERY IN TEXTILE EXPORTS TO AUSTRALIA AS A RESULT OF INCREASED TARIFF QUOTAS FOR 1976 MAY BE OFFSET BY THE IMPACT OF A SUBSTANTIAL EXTENSION IN COVERAGE OF THE TARIFF QUOTAS FROM JULY 1 THIS YEAR, HE POINTED OUT.

THIS EXTENSION, HE SAID, TOOK IN THOSE ITEMS WHICH WERE PREVIOUSLY SUBJECT TO A BILATERAL RESTRAINT AGREEMENT BETWEEN HONG KONG AND AUSTRALIA WHICH LAPSED ON JUNE 30, 1976.

+AS FAR AS HONG KONG IS CONCERNED THEY NOW AFFECT ABOUT 50 PER CENT OF THE TEXTILE PRODUCTS WE EXPORTED TO AUSTRALIA IN 1975,+ HE SAID.

+THE GLOBAL TARIFF QUOTAS WHICH HAVE BEEN SET FOR THESE NEW ITEMS ARE GENERALLY COMPARABLE TO, OR ARE HIGHER THAN, AUSTRALIAN IMPORTS OF THESE PRODUCTS IN 1975, SO THEIR EFFECT ON THE VOLUME OF HONG KONG'S EXPORTS OF THESE PRODUCTS TO AUSTRALIA WILL BE LARGELY DETERMINED BY OUR COMPETITIVENESS, + MR. DORWARD SAID.

HOWEVER, HE POINTED OUT THAT THERE WOULD BE A DEPRESSING EFFECT ON PRICES AND PROFIT MARGINS BECAUSE OF THE TRANSFER OF COMMERCIAL BARGAINING POWER TO AUSTRALIAN IMPORTERS WHO, AS QUOTA HOLDERS, COULD SELECT THEIR SOURCES OF IMPORT.

+THE EXPORT VALUE TO HONG KONG OF THE PRODUCTS NEWLY SUBJECTED

TO TARIFF QUOTAS WAS $180 MILLION IN 1975, + HE SAID.

THOUGH IT WAS NOT POSSIBLE TO PREDICT THE LIKELY DURATION OF THESE MEASURES, MR. DORWARD SAID THAT A FURTHER WIDENING OF THE COVERAGE MUST BE ASSUMED TO BE UNLIKELY.

HE POINTED OUT THAT IN ANNOUNCING THESE MEASURES, THE AUSTRALIAN GOVERNMENT HAD DESCRIBED THEM AS SHORT TERM MEASURES, PENDING RECEIPT LATER THIS YEAR OF A REPORT BY THE INDUSTRIES ASSISTANCE COMMISSION ON THE LONG TERM PROTECTIVE NEEDS OF THE CLOTHING

INDUSTRY.