XN000022-1986-07-01 — Page 2

TUESDAY, JULY 1, 1986

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HK-U.S. TEXTILES AGREEMENTS INITIALLED

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A +MODIFICATION AND EXTENSION OF THE HK-U.S. BILATERAL TEXTILES AGREEMENT WAS INITIALLED IN THE EARLY HOURS OF MONDAY, JUNE 30, IN WASHINGTON.

HONG KONG'S CHIEF TEXTILES NEGOTIATOR, DIRECTOR OF TRADE, MR HAMISH MACLEOD, DESCRIBED THE NEW AGREEMENT AS +YET ANOTHER STEP TO TIGHTEN RESTRAINTS ON HONG KONG'S EXPORTS.+

HE ATTRIBUTED THE RIGID STANCE OF THE U.S. ADMINISTRATION TO THE STRONG PROTECTIONIST FEELING IN THE U.S.A, AND THE THREAT OF PROTECTIONIST LEGISLATION SUCH AS THE THURMOND-JENKINS BILL, THIS SITUATION WAS REFLECTED IN THE NEGOTIATIONS THEMSELVES.

+ALTHOUGH THE AGREEMENT REACHED IS NOT AS RESTRICTIVE AS THE ORIGINAL U.S.A. PROPOSAL, IT INVOLVES OVERALL LIMITS AT 1985 TRADE LEVELS, WITH VERY LOW GROWTH RATES. WHILE WE ALSO ACHIEVED SOME IMPROVEMENTS IN FLEXIBILITY AND GROWTH PROVISIONS THE SE CERTAINLY DO NOT COMPENSATE FOR THE NEW RESTRICTIVE ELEMENTS IN THE AGREEMENT, HE SAID.

THE SECRETARY FOR TRADE AND INDUSTRY, MR E.P. HO, ALSO IN WASHINGTON TOGETHER WITH THE ENTIRE TEXTILES ADVISORY BOARD, COMMENTED THAT THE PRESENCE OF THE BOARD THROUGHOUT THE NEGOTIATIONS ENABLED THE TRADE EFFECTS OF THE U.S. PROPOSAL ON THE ENTIRE TEXTILES AND GARMENT INDUSTRIES IN HONG KONG TO BE ASSESSED ON THE SPOT.

HE ADDED THAT THE HONG KONG TEAM HAD FOUGHT HARD, AND WON SOME USEFUL IMPROVEMENT OVER EARLIER PROPOSALS, INCLUDING MODEST IMPROVEMENTS ON FLEXIBILITY PROVISIONS. BUT IN THE END, THE POLITICAL REALITIES HAD TO BE FACED.

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THE MAIN FEATURES OF THE AGREEMENT, WHICH EXTENDS TO 1991,

(A) EXTENSION OF COVERAGE TO SILK AND VEGETABLE FIBRES

(ALTHOUGH BLENDS WITH A HIGH PROPORTION OF SILK ARE EXCLUDED);

(B)

INTRODUCTION OF GROUP LIMITS FOR THREE MAIN GROUPS OF CATEGORIES THE EXISTING COTTON, WOOL, AND MAN-MADE FIBRE CATEGORIES BEING SPLIT INTO APPAREL AND NON-APPAREL, AND A NEW APPAREL GROUP BEING FORMED FOR PREVIOSUSLY UNRESTRAINED VEGETABLE FIBRES.

FURTHER DETAILS WILL BE ISSUED TO THE INDUSTRY, AND IMPLEMENTATION DETAILS WILL BE WORKED OUT AS SOON AS POSSIBLE, IN CONSULTATION WITH THE TEXTILES ADVISORY BOARD, TO MINIMISE UNAVOIDABLE DISRUPTION TO THE TRADE.

/ALTHOUGH