TNAG-0004-FCO40-40-Departmental-briefs-about-Hong-Kong-1968 — Page 185

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cotton textiles for five years until 1970. Hong Kong is to continue

to receive quotas at the previous levels totalling 185 million square

yards, plus the yarn quota, with some small provision for growth (about

1% per annum).

The arrangement, which gives Hong Kong about 10% of

the total U.K. market for cotton textiles, is considered reasonably

satisfactory by the Hong Kong Government and industry. It leaves

Hong Kong as the largest exporter of cotton textiles to our market

by value and, compared with most other countries, puts her in the

position of a privileged supplier.

This

6. Since the original agreement with the U.K. pressures for restrictive

action on cotton textile exports have spread to other markets

(notably the U.S., Canada and Western Europe) under the terms of the

G.A.T.T. Long Term Arrangement on Cotton Textiles. Despite the

restrictions, however, Hong Kong's exports of these products to the

United States in particular have steadily expanded. She has recently

concluded a bilateral agreement under the G.A.T.T. arrangement with

the U.S. Government which permits her to export about 340 million

square yards per annum to the American market, with growth provisions

which will permit this total to rise to over 400 million square

yards over five years (i.e. over twice her sales in the U.K.)

will make Hong Kong the rival of Japan as the biggest exporter of

these products to the United States. Despite severe and unjustified

restrictions in France, Hong Kong's cotton textile exports to the other

Common Market countries and other countries in Western Europe have

also been roving in recent years, with the result that at the end of

1966 West Germany was added to the list of countries which had required

the Colony to negotiate restraint arrangements. Hong Kong is now the

second largest exporter of cotton textiles in the world after Japan.

A new and growing section of Hong Kong's exports is woollen knitted

outerwear (sweaters, pullovers, cardigans etc.) Here her two biggest

markets are Western Germany and the United States, both of which take

considerably more than the U.K., despite the free entry in this country

for Hong Kong goods. Sales in Western Germany have been increasing so

7.

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