XN000022-1985-08-29 — Page 2

THURSDAY, AUGUST 29,

HONG KONG'S CASE EMPHASISED AGAIN

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THE SECRETARY FOR TRADE AND INDUSTRY, MR E.P. HO, HAS WRITTEN TO LEADING UNITED STATES SENATORS AND CONGRESSMEN WHO RECENTLY VISITED HONG KONG TO REINFORCE POINTS MADE IN OPPOSITION TO THE JENKINS BILL.

MR HO FIRST REFERRED TO THE BILL'S CLAIM THAT IMPORT PENETRATION IN APPAREL PRODUCTS REACHED 50 PER CENT IN 1984.

+THIS IS MISLEADING IN TWO RESPECTS THE BILL RELATES TO BOTH TEXTILE AND APPAREL PRODUCTS, AND FOR THESE TAKEN TOGETHER IMPORT PENETRATION IS APPROXIMATELY 20 PER CENT.

+EVEN IF APPAREL ALONE IS TAKEN, IMPORT PENETRATION IS ONLY ABOUT 20 TO 26 PER CENT. IN SOME OF THE CATEGORIES OF GOODS BROUGHT UNDER RESTRAINT BY THE U.S. RECENTLY, THROUGH THE 'CALL' SYSTEM, U.S. INDUSTRY HAS OVER 90 PER CENT OF THE DOMESTIC MARKET,+ HE SAID.

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THE ARGUMENT THAT RECENT INCREASES IN UNEMPLOYMENT WERE MAINLY ATTRIBUTABLE TO INCREASES IN IMPORTS DID NOT STAND UP, SAID MR HO. ACCORDING TO THE RETAIL INDUSTRY TRADE ACTION COALITION VIRTUALLY ALL THE JOB LOSSES OCCURRED PRIOR TO 1982 WHILE MOST OF THE GROWTH IN IMPORTS BETWEEN 1980 AND 1984 TOOK PLACE IN THE PAST TWO YEARS. IT WAS MISLEADING TOO TO CLAIM THAT RECENT INCREASES IN IMPORTS SHOW THAT RESTRAINTS IMPOSED BY THE MFA AND ASSOCIATED BILATERAL AGREEMENTS ARE NOT WORKING.

+MUCH OF THE INCREASE CAME FROM UNRESTRAINED SOURCES SUCH AS THE EEC WHILE THE MAJOR DEVELOPING SUPPLIERS HAVE BEEN EFFECTIVELY RESTRAINED FOR MOST OF THEIR EXPORTS OVER THE LIFE OF THE MFA.

+OVER THE PERIOD OF THE MFA, 1974-84, THE INCREASE IN U.S. IMPORTS FROM HONG KONG OF MFA PRODUCTS HAS AVERAGED ONLY 5.2 PER CENT PER ANNUM ACCORDING TO OFFICIAL U.S. STATISTICS AND IN THE SAME PERIOD OUR U.S. IMPORT SHARE HAS DECLINED FROM 14.1 PER CENT TO 10.5 PER CENT,

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+MOREOVER, THOSE CATEGORIES REGARDED BY THE U.S. AS 'SENSITIVE' ARE ONLY PERMITTED 0.5 TO 1.5 PER CENT GROWTH UNDER THE CURRENT HONG KONG-UNITED STATES AGREEMENT WHICH STILL HAS TWO-AND-A-HALF YEARS TO GO.

+THE PRESSURE FOR INCREASED PROTECTION HAS COINCIDED WITH A LEVELLING OFF OF MFA IMPORTS INTO THE U.S. IN THE FIRST HALF OF 1985, COMPARED WITH THE FIRST HALF OF 1984, THE OVERALL INCREASE OF SUCH IMPORTS IS ONLY 1.3 PER CENT, SAID MR HO.

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+MOREOVER, THE MAJOR RESTRAINED SUPPLIERS ACTUALLY SHOW A DECREASE - HONG KONG BY 7.6 PER CENT WHILE THE MAJOR UNRESTRAINED SUPPLIERS SHOW AN INCREASE THE EEC BY 37 PER CENT. IN SUCH CIRCUMSTANCES TO SEEK TO CUT BACK RESTRAINED SUPPLIERS IS HARDLY REASONABLE.+

MR HO'S LETTER WAS SENT TO SENATOR ROBERT DOLE AND OTHER SENATORS AND TO CONGRESSMAN SAM GIBBONS AND OTHER CONGRESSMEN, ALL OF WHOM VISITED HONG KONG LAST WEEK.

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