TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 159

obligations. No Government can afford to get into a situation where it is inhibited or prevented from using the escape-clause by strict definition. The GATT has survived and will survive in practice only so long as it has the necessary flexibility to enable Governments to me find a viable compromise between their international obligations and their internal pressures.

6.

The developing countries might see some theoretical advantage in a stricter definition of Article XIX criteria but they would probably be fearful of how it would operate in practice and they may well prefer to continue the present practice of reaching agreement bilaterally under Article XXII in the solution of particular problems. Under Article XIX the importing country can impose quota restrictions which would cut trade back and can operate import as opposed to export control. Only those countries that would be in a position to retaliate could safely contemplate a situation in which bilateral restraints were outlawed

and all action was to be under Article XIX,

7. From Hong Kong's point of view a futher criteria of the paper is that it does not even consider whether the proposals made would serve Hong Kong's trading interests. Hong Kong lives by exports and 50% of its exports (which in 1969 will almost certainly exceed £700m. in value) are in textiles and garments. Hong Kong would prefer to continue its present policy of dealing with problems in cotton textiles by means of restraint agreements under the LTA and in the case of non-cotton textiles of having consultations under Article XXII of the GATT and when necessary agreeing to restrain its exports. This policy

has served as well. We have been able to restrict there

arrangements to a narrow range of products, we have secured reasonable levels of trade and we have maintained

the va uable principle of export control. The arrangementx that we have made have not led to a great proliferation of "voluntary" restraints on non-cotton textiles. Since all this started four years ago we have been obliged to agree only to restraints on:

8.

(a) woollen knitwear to West Germany (restraint

now abandoned by agreement);

(b) on a limited range of polyester/cotton

garments to Canada;

(c) a limited range of woollen and synthetic

fibre garments to Sweden;

(d) ditto to Norway.

Hong Kong cannot of course object if H.M.G. wishes