XN000022-1985-04-30 — Page 5

TUESDAY, APRIL 30, 1985

+AND IN SEARCH OF SOME SHRED OF INTELLECTUAL JUSTIFICATION FOR THIS EXTRAORDINARY LINE, IT RAISES THE BANNER OF 'FAIR TRADE' WHICH CAN BE USED AGAINST VIRTUALLY ALL IMPORTS FROM DEVELOPING COUNTRIES, SINCE AMONG OTHER THINGS IT REGARDS LOWER WAGES THAN IN THE U.S.A. AS UNFAIR.

+IT IS NOT A REASONABLE ARGUMENT. BUT IT HAS POLITICAL APPEAL, MR MACLEOD SAID.

PARADOXICALLY, HE SAID, PROTECTIONISM BY OTHERS WAS NOT NECESSARILY BAD FOR HONG KONG, SINCE IN THE LONG RUN IT HANDICAPPED THE COUNTRY PRACTISING THE PROTECTION.

+FOR EXAMPLE, A COUNTRY BENT ON CRIPPLING ITS GARMENT INDUSTRY WOULD SUCCEED QUITE WELL BY PROTECTING ITS TEXTILE INDUSTRY, THE RAW MATERIAL OF THE GARMENTS. YET THIS IS PRECISELY WHAT THE DEVELOPED COUNTRIES DO, HE SAID.

HE SAID THERE WERE MANY FAIRLY BROAD GUESSTIMATES+ OF THE COST OF PROTECTION.

A 1983 STUDY BY THE U.S. CENTRE FOR THE STUDY OF BUSINESS ESTIMATED THAT AMERICAN CONSUMERS SPEND US$58.5 BILLION MORE EACH YEAR FOR A VARIETY OF GOODS, INCLUDING TEXTILES AND APPAREL, THAN THEY OTHERWISE MIGHT HAVE, AS A RESULT OF PROTECTION.

ANOTHER U.S. STUDY SUGGESTED THAT THE COST OF TEXTILE AND APPAREL JOBS SAVED WAS ABOUT US$35 000 PER JOB PER YEAR. THE JOBS WHICH WERE PROTECTED PAID AN AVERAGE SLIGHTLY LESS THAN US$10 000 PER YEAR.

+THERE IS NO SINGLE, SIMPLE REASON FOR HONG KONG'S SUCCESS A PRODUCTIVE WORKFORCE, ENTERPRISING ENTREPRENEURS, EVEN A HANDS-OFF AND REASONABLY EFFICIENT GOVERNMENT WHICH DECLINES TO SUBSIDISE ANY INDUSTRY, ALL PLAY AN IMPORTANT PART - BUT THERE SEEMS NO DOUBT THAT ONE OF THE KEY ELEMENTS IS OUR CONTINUING ADHERENCE TO FREE TRADE.

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+RESTRICTING THE CHOICE AND INCREASING THE PRICE OF IMPORTED RAW MATERIALS AND COMPONENTS IS NOT A SENSIBLE COURSE OF ACTION FOR ANYONE,+ MR MACLEOD SAID.

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