XN000022-1980-05-29 — Page 7

6

THURSDAY, MAY 29, 1980

+ THE BASIC OBJECTIVE OF THIS WAIVER WAS TO ENABLE THOSE PARTIES TO THE MFA WHICH WERE FACING SEVERE PROBLEMS TO ADOPT NECESSARY STRUCTURAL ADJUSTMENTS, + SAID MISS DUNN.

HOWEVER, WE

IN THE TRADE HAVE SEEN LITTLE SIGN OF STRUCTURAL ADJUSTMENTS, NOR ANY INDICATION THAT IMPORTING COUNTRIES ARE RETURNING TO THE FRAMEWORK OF THE MFA.+

THERE WAS EVIDENCE THAT SOME DEVELOPED COUNTRIES WERE INSTEAD MOVING FURTHER AWAY FROM IT. MISS DUNN REFERRED TO THE US ADMINISTRATION TEXTILE PROGRAMME OF FEBRUARY 15, 1979, COMMONLY KNOWN AS THE +WHITE PAPER+, AS AN ILLUSTRATION, WHICH COMMITTED THE US GOVERNMENT TO EXTEND FURTHER PROTECTION TO ITS TEXTILE AND APPAREL INDUSTRY.

+ THE WHITE PAPER STARTS WITH THE PREMISE THAT ASSISTANCE IS REQUIRED FOR A 'BELEAGUERED TEXTILE AND APPAREL INDUSTRY'. THIS DESCRIPTION OBVIOUSLY CANNOT STAND UP TO CLOSE EXAMINATION. A VARIETY OF SOURCES, INCLUDING THE GATT, INDICATE THAT THE PRODUCTION OF TEXTILES IN THE US HAS BEEN ON THE INCREASE DURING THE PERIOD 1976 TO 1978.

+ THE WHITE PAPER MAKES MUCH OF THE SO-CALLED SURGE PROBLEM. IT PROVIDES THAT, WHERE QUOTAS ARE UNDER-UTILIZED IN ONE YEAR STEPS WOULD BE TAKEN IN THE FOLLOWING YEAR TO ENSURE THAT THERE WOULD BE NO SURGE OF IMPORTS RESULTING FROM THE COMBINATION OF GREATER UTILIZATION OF QUOTA AND THE FLEXIBILITY PROVISIONS, + SAID MISS DUNN.

+THIS PROPOSITION IS COMPLETELY OPPOSED TO THE BASIC MFA PRINCIPLE THAT THE QUOTA CEILINGS AGREED BETWEEN THE PARTIES ARE THEMSELVES MEASURES DESIGNED TO REMOVE MARKET DISRUPTION OR ELIMINATE A REAL RISK OF MARKET DISRUPTION.

+GIVEN THIS, HOW AN EXPORTING COUNTRY PERFORMS WITHIN THE AGREED QUOTA CEILINGS CANNOT BE REGARDED AS GIVING RISE TO MARKET DISRUPTION OR TO RISKS OF MARKET DISRUPTION. AT THE SAME TIME, QUOTA CEILINGS GUARANTEE THE ACCESS RIGHTS FOR THE EXPORTING COUNTRY, THE CERTAINTY OF WHICH IS THE QUID PRO QUO FOR AGREEMENT TO EXERCISE RESTRAINT. +

THE WHITE PAPER ALSO CALLED FOR THE ANNUAL EVALUATION OF IMPORT GROWTH IN THE CONTEXT OF THE ESTIMATED RATE OF GROWTH IN THE DOMESTIC MARKET'.

+ IT IS DIFFICULT TO SEE HOW THIS CONCEPT CAN BE APPLIED IN PRACTICE, SAID MISS DUNN. +EVEN IF THE EVALUATION OF DOMESTIC CONSUMPTION COULD BE ASSESSED QUICKLY AND OBJECTIVELY, THIS CONCEPT OVERLOOKS THE FACT THAT INTERNATIONAL TRADE IN TEXTILE PRODUCTS IS HIGHLY CYCLICAL. AN EVALUATION BASED ON ONE PARTICULAR YEAR CANNOT BE USED AS A BASIS FOR ADJUSTING THE QUOTAS FOR THE FOLLOWING YEAR BECAUSE THE SIZE OF THE MARKET MAY - INDEED, IS BOUND TO VARY.+

THE TEXTILE INDUSTRY IN HONG KONG, IN COMMON WITH THOSE OF OTHER DEVELOPING EXPORTING ECONOMIES, FELT STRONGLY THAT, BEFORE CONSIDERING WHAT THE NEXT MFA MIGHT LOOK LIKE, THERE SHOULD BE A CLEAR ASSURANCE THAT THE DEVELOPED IMPORTING COUNTRIES WILL STAND BY THE IR OBLIGATIONS AND ACT IN GOOD FAITH.

/+A A