XN000022-1982-04-05 — Page 13

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MONDAY, APRIL 5. 1982

HONG KONG CHALLENGES EEC MANDATE ON MFA

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THE LONDON OFFICE OF THE HONG KONG GOVERNMENT TODAY RELEASED A SURVEY OF UK TRADE IN TEXTILES AND CLOTHING COVERING THE WHOLE PERIOD OF THE SECOND MULTI-FIBRE ARRANGEMENT (MFA II - 1978-81) WHICH SHOWS THAT

* MFA II HAS NOT BEEN A BALANCED ARRANGEMENT BECAUSE

THE SHARE OF UK IMPORTS HELD BY SUPPLIERS IN LESS DEVELOPED COUNTRIES (LDCS) HAS DROPPED TO 30 PER CENT, WHEREAS SUPPLIERS IN DEVELOPED COUNTRIES HAVE INCREASED THE IR SHARE TO 67 PER CENT.

* THE CUT-BACKS IMPOSED ON HONG KONG IN 1977 HAVE BENEFITED NEITHER THE UK INDUSTRY NOR OTHER LDC SUPPLIERS- THE MAIN BENEFICIARIES HAVE BEEN EEC SUPPLIERS, WHO HAVE INCREASED THEIR SHARE OF THE UK IMPORT MARKET FROM 38 PER CENT TO 42 PER CENT.

*

*

THE MASSIVE DETERIORATION IN THE UK VISIBLE TRADE BALANCE IN TEXTILES AND CLOTHING HAS BEEN MAINLY DUE TO THE TRADE WITH DEVELOPED BOUNTRIES GOING INTO DEFICIT, COMPARED WITH A SURPLUS PRIOR TO MFA II.

THE UK INDUSTRY'S MAIN PROBLEM APPEARS TO BE LACK OF COMPETITIVENESS WITH DEVELOPED COUNTRIES, MANY OF WHICH HAVE MUCH HIGHER WAGE RATES, AND THERE IS NO INDICATION OF ANY SIGNIFICANT IMPROVEMENT IN PRODUCTIVITY.

THE SURVEY HAS BEEN RELEASED TO COINCIDE WITH THE VISIT TO LONDON, BRUSSELS AND GENEVA, OF MR BILL DORWARD, HONG KONG'S DIRECTOR OF TRADE INDUSTRY AND CUSTOMS.

MR DORWARD POINTED OUT THAT THE FALLING IMPORT SHARES OF LDC SUPPLIERS GAVE NO JUSTIFICATION FOR MORE RESTRICTIVE MEASURES UNDER THE RECENTLY NEGOTIATED MFA 11, AND YET IT APPEARED THAT THE EEC HAD ADOPTED A MANDATE WHICH COULD BE USED TO GIVE EFFECT TO PROTECTIONIST DEMANDS IN THE COMMUNITY, SUCH AS THOSE OF THE UK INDUSTRY.

+ IF THE EXPERIENCE OF THE LAST 20 YEARS AND MORE IS ANYTHING TO GO BY, IT IS THAT THOSE WHO LOBBY ON BEHALF OF THE UK TEXTILES AND CLOTHING INDUSTRIES ARE NEVER SATISFIED FOR ANY LENGTH OF TIME NO MATTER HOW HIGH THE LEVEL OF PROTECTION PROVIDED BY THE GOVERNMENT, SAID MR DORWARD.

+

+CONSIDERATION OF BRITAIN'S OVERALL NATIONAL INTEREST WOULD BE FURTHERED BY AN IMPARTIAL OFFICIAL REVIEW OF THE PROBLEMS OF THE UK TEXTILES AND CLOTHING INDUSTRIES, THE CAUSES OF THOSE PROBLEMS AND THE COSTS AND BENEFITS OF ANY MEASURES TO ALLEVIATE THEM, HE SAID.

SIR JACK CATER, HONG KONG'S COMMISSIONER IN LONDON, HAS SENT THE SURVEY TO THOSE MPS WHO TAKE AN INTEREST IN HONG KONG AND IN TEXTILES TO SEEK THEIR SUPPORT FOR HONG KONG IN THE FORTHCOMING BILATERAL NEGOTIATIONS WITH THE EEC.

/RECALLING THE