XN000022-1980-05-29 — Page 4

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THURSDAY, MAY 29, 1980

+AS FAR AS HONG KONG IS CONCERNED, IT WAS OUR GENERAL EXPERIENCE THAT THE MAIN BILATERAL AGREEMENTS CONCLUDED DURING THE YEARS 1974 TO 1977 UNDER THE ORIGINAL MFA HONOURED ITS PROVISIONS.

I THINK AN IMPARTIAL OBSERVER WOULD AGREE THAT THESE ARRANGEMENTS WORKED WELL ENOUGH IN THE RECESSION YEARS.

+AND THEN CAME 1977. EVEN BEFORE THE ORIGINAL MEA HAD EXPIRED IT WAS CLEAR THAT ALL THE FINE PROMISES ABOUT PROGRESSIVE LIBERALISATION WERE GOING TO BE CONVENIENTLY FORGOTTEN, WE WERE INSTEAD TREATED TO THE UNED IFYING SPECTACLE OF THE GOVERNMENTS OF THE WORLD'S RICHEST AND MOST POWERFUL TRADING NATIONS GIVING IN TO PROTECTIONIST CLAMOUR, AND EXACTING FROM THEIR WEAKER TRADING PARTNERS REGRESSIVE AGREEMENTS ON THE FLIMSIEST OF ECONOMIC AND MORAL JUSTIFICATIONS, SAID MISS DUNN.

WHILST IMPORTING COUNTRIES COULD ONLY SEEK TO RESTRAIN TEXTILE IMPORTS WHEN THE EXISTENCE OF MARKET DISRUPTION, OR REAL RISKS OF MARKET DISRUPTION, HAD BEEN ESTABLISHED, THE BURDEN WAS ON THE IMPORTING COUNTRY TO ESTABLISH ITS CASE.

SHE ACCUSED IMPORTING COUNTRIES OF GENERALLY SHOWING LITTLE RESPECT FOR THIS PROVISION WHEN SEEKING RESTRAINT.

+OFTEN INADEQUATE STATISTICS ARE PROVIDED WHICH DO NOT SUPPORT A CASE FOR RESTRAINT EITHER ON THE GROUNDS OF MARKET DISRUPTION, OR REAL RISKS THEREOF.

+ INDEED, IN SOME CASES, IT HAS BEEN OBVIOUS THAT REQUESTS FOR RESTRAINT HAD A POLITICAL RATHER THAN AN ECONOMIC BASIS. FAR FROM MAKING A GENUINE ATTEMPT TO JUSTIFY MARKET DISRUPTION,

IMPORTING COUNTRIES HAVE OFTEN CIRCUMVENTED THIS BASIC CRITERION FOR RESTRAINT BY A VARIETY OF DEVICES, INCLUDING THE TRIGGER POINT MECHANISM, WHICH EXISTS IN BOTH THE EEC AND THE US AGREEMENTS WITH HONG KONG, SHE SAID.

NOT ONLY HAVE DIFFICULTIES ARISEN WITH THE FAILURE OF IMPORTING COUNTRIES TO PROVE MARKET DISRUPTION, MISS DUNN SAID, BUT A NEW CONCEPT HAS ALSO EMERGED WHICH SEEKS TO JUSTIFY RESTRAINT BY AN IMPORTING COUNTRY ON THE BASIS OF WHAT IS KNOWN AS 'CUMULATIVE MARKET DISRUPTION'.

+THIS CONCEPT SUGGESTS THAT, WHEN AN IMPORTING COUNTRY HAS ESTABLISHED THAT ITS MARKET IS BEING DISRUPTED BY LOW-PRICED IMPORTS OF A PARTICULAR PRODUCT OR PRODUCTS FROM PARTICULAR SOURCES, ANY INCREASE IN THESE IMPORTS - HOWEVER SMALL AND FROM ALL OTHER SOURCES - WOULD CONSTITUTE A PART OF THAT DISRUPTION AND SHOULD BE RESTRAINED, SAID MISS DUNN.

THE CONSEQUENCE WAS THAT IT BECAME POSSIBLE FOR AN IMPORTING COUNTRY, HAVING ONCE ESTABLISHED A CASE OF MARKET DISRUPTION, OR A REAL RISK, AGAINST ONE SUPPLIER, TO INTRODUCE RESTRAINTS AGAINST ALL OTHER SUPPLIERS WITHOUT HAVING TO MAKE A CASE FOR RESTRAINT WITH EACH OF THE SUPPLIERS, AS IS REQUIRED UNDER THE MFA.

+THIS CONCEPT CANNOT BE SUPPORTED BY REFERENCE TO THE MFA. IT IS AN INVENTION OF THE IMPORTING COUNTRIES IN AN ATTEMPT TO RESTRICT FURTHER THE ACCESS RIGHTS OF EXPORTING COUNTRIES, AND IT HAS GIVEN RISE TO YET ANOTHER BLATANT DISREGARD FOR THE RAISON D'ETRE OF THE MFA, NAMELY, THAT IT WAS CREATED SPECIFICALLY TO DEAL WITH THE SITUATION WHERE DAMAGE IS BEING CAUSED BY IMPORTS OF PARTICULAR PRODUCTS FROM PARTICULAR SOURCES, SHE DECLARED.

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