XN000022-1984-08-06 — Page 2

MONDAY, AUGUST 6, 1984

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U.S. TOLD OF FEARS OVER TEXTILE MOVE

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TOLD THE THE SECRETARY FOR TRADE AND INDUSTRY, MR E.P. HO ACTING U.S. CONSUL-GENERAL, MR RICHARD WILLIAMS, TODAY (MONDAY) THAT THE PROPOSED REGULATIONS TO BE IMPLEMENTED ON SEPTEMBER 7, 1984 BY THE UNITED STATES AGAINST TEXTILE IMPORTS WOULD SIGNIFICANTLY DISRUPT TRADE AND CAUSE GREAT HARDSHIP IN HONG KONG.

DURING A MEETING WITH MR WILLIAMS. MR HO GAVE THE CONSUL- GENERAL A DIPLOMATIC NOTE DRAWING THE ATTENTION OF THE RELEVANT UNITED STATES AUTHORITIES TO THESE MATTERS WITH A VIEW TO ADDRESSING AND RELIEVING THE IMMEDIATE PROBLEMS CONFRONTING HONG KONG.

MR HO UNDERLINED THE FACT THAT HONG KONG'S ORIGIN PRACTICE WAS IN ACCORDANCE WITH LONG-STANDING INTERNATIONAL PRACTICE WHICH HAD NOT BEEN QUESTIONED BY HONG KONG'S TRADING PARTNERS.

THE PROPOSED REGULATIONS AS PUBLISHED IN THE FEDERAL REGISTER IN WASHINGTON ON AUGUST 3 CAME AS A SURPRISE AND WAS, AS MR HO DESCRIBED IT, +A SERIOUS BLOW TO WHAT IS LEGITIMATE TRADE IN A SECTOR THAT IS ALREADY SUBJECT TO RESTRICTIONS+.

HE SAID THE NEW RULES APPEARED TO BE AIMED SPECIFICALLY AT TERRITORIES WITH LIMITED RESOURCES, SUCH AS HONG KONG, WHERE THE EFFECT ON TRADE WOULD BE MOST KEENLY FELT.

THE PROPOSED NEW ORIGIN RULES SEEMED TO POSE A SERIOUS THREAT TO THE KNITWEAR, DYEING AND FINISHING INDUSTRIES. IN 1983 TERMS, $2 200 MILLION WORTH OF EXPORTS COULD BE AFFECTED OR IN VALUE TERMS ABOUT ONE-SEVENTH OF TOTAL EXPORTS TO THE UNITED STATES UNDER THE BILATERAL AGREEMENT.

THERE WAS ALSO UNCERTAINTY AS TO WHETHER OTHER EXPORTS PROPERLY LICENSED AND DOCUMENTED UNDER THE BILATERAL AGREEMENT WOULD BE ADMITTED INTO THE UNITED STATES, AND THIS MIGHT CAUSE SUBSTANTIAL DELAYS TO SHIPMENTS.

IN ADDITION TO ASKING THE UNITED STATES AUTHORITIES TO ADDRESS AND RELIEVE THE IMMEDIATE PROBLEMS CONFRONTING HONG KONG. MR HO SAID THE HONG KONG GOVERNMENT WOULD SEEK EARLY CONSULTATIONS ON THE NEW ORIGIN RULES WITH THE UNITED STATES UNDER THE TERMS OF THE BILATERAL AGREEMENT.

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