Long Term Arrangement (A). At first sight it does not look very big. Hong Long is a major supplier to the United States of non-cotton textiles only i n clothing and ac casorico, we understand that the sector of trude in which she has the highest slare of U.S. imports is in knit ed woollen outerwear. If the only eflect upon Hong Kong of the U.3. proposals were to be upon these few items, the consequences would ..ot be particularly serious.
But in fact ilong kong must as ume that the effects will be more widespread than this, because of two "multipliers".
if the The first is a "¿cographical multiplier".
Indeed
11.5. imposes quotas on non-cotton textiles, it must be assumed that many other countries will do the same. it will be difficult for Governments in most developed countries to reaist internal pressure from their own textile industries to take a lear out of the Jnited States' book. Therefore, from ilong kong's point of view, what will be at risk will be her exports of all non-cotton textiles to virtually all her markots. This could put at risk something like one-fifth of her total exports and that fraction la rising. Ir damage on this scule materialises it could
not full to have grave political consequences,
The second is what might be called the "commodity multiplier", quotas on cotton textiles the cay before
atcol yesterday; non-cotton textiles today. yesterday;
Seven Who knows where this process will end if it is now theer a new momentum, Hong Kong must assume that other industries in the United States will consicer that they have us good an economic case as the textile industry for demanding Therefore quota protection against Asian competition. much more than one-fifth of Hong Kong's total exports would be put at risk,
It is true that liong kong has entered into a few arrangements with our consent for voluntary restraint on exports of certain very limited categories of nou-
For instance anoraks for Sweden. cotton textile goods.
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