XN000022-1987-03-30 — Page 6

MONDAY, MARCH 30, 1987

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HK'S SHARE IN UK TEXTILE MARKET DROPS

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HONG KONG'S SHARE OF THE UNITED KINGDOM'S IMPORT MARKET FOR TEXTILE PRODUCTS HAS CONTINUED TO FALL IN RECENT YEARS.

THIS WAS THE MAIN FINDING OF AN ANNUAL REVIEW OF UK'S TRADE IN TEXTILES UNDER THE MULTI-FIBRE ARRANGEMENT.

+

THE REVIEW, CARRIED OUT BY THE HONG KONG GOVERNMENT OFFICE IN LONDON, SHOWED THAT DISCRIMINATION AGAINST DEVELOPING COUNTRIES (LDCS) IN GENERAL, AND HONG KONG IN PARTICULAR, WAS WORSE UNDER MFA 111 THAN UNDER MFA 11.

WHILE THE LDCS SHARE OF THE UK IMPORT MARKET, CALCULATED IN VALUE TERMS, DECLINED FROM 29 PER CENT UNDER MFA II (1978-1982) TO 25 PER CENT UNDER MFA 111 (1983-86), HONG KONG FARED EVEN WORSE WITH ITS SHARE DECLINING FROM 13 PER CENT TO 10 PER CENT.

+THAT HONG KONG, WITH ITS COMPLETELY OPEN MARKET, SHOULD HAVE MERITED SUCH TREATMENT IS GROSSLY INEQUITABLE.

+ IT IS ALSO COUNTER-PRODUCTIVE TO THE UK'S DECLARED INTENTION THAT NEWLY-INDUSTRIALISING COUNTRIES SHOULD OPEN UP THEIR MARKETS.

+ IT REMAINS TO BE SEEN WHETHER THE SLIGHT RECOGNITION PAID TO HONG KONG'S OPEN MARKET UNDER MFA IV (1987-1991) WILL HELP MATERIALLY TO REDRESS THIS SITUATION, THE REVIEW SAID.

THE REVIEW SAID THAT THE UK'S TRADE DEFICIT ON TEXTILES AND CLOTHING REACHED A MASSIVE+ 2.6 BILLION POUND STERLING, OF WHICH TWO-THIRDS WAS DUE TO TRADE WITH OTHER EEC COUNTRIES, FROM WHICH THE UK IMPORTED TWICE AS MUCH AS IT EXPOPTED.

DESPITE THE DEFICIT, THE UK TEXTILES AND CLOTHING INDUSTRIES REGISTERED FASTER GROWTH THAN THE AVEPAGE OF THE UK ECONOMY, WITH PROFITABILITY INCREASING.

THE REVIEW SAID: +EEC SUPPLIERS INCREASED THEIR SHARE OF THE UK IMPORT MARKET AT THE EXPENSE OF THE LOCS.

+THIS DOES NOT NECESSARILY MEAN THAT THE UK TEXTILES AND CLOTHING INDUSTRIES DERIVED NO BENEFIT AT ALL FROM MFA 111, IF ONLY BECAUSE THE ARTIFICIALLY INFLATED PRICE LEVEL WILL HAVE ENLARGED THE INDUSTRIES' PROFITS.

+BUT THE GREATEST DIVERSION OF TRADE FROM COMPETITIVE SOURCES TO HIGHER-PRICED SUPPLIERS WILL HAVE INCREASED THE COST TO THE BRITISH CONSUMER AND TO THE UK ECONOMY OF THE PROTECTION PROVIDED TO THE INDUSTRIES, WITHOUT DOING ANYTHING TO REDRESS THE LARGE TRADE DEFICIT THE INDUSTRIES HAVE WITH THE EEC.+

/POINTING TO