It was difficult to accept the idea that the concept of
free trade had no exceptions or did not allow reasonable
time foradjustment.
The growth of imports was the problem.
He thought that the employment trend in the textile industry
was likely to deteriorate. There had been a great growth
in imports from Japan and Taiwan and Korea in the products
of m.m.f.
After some skirmishing about what the US wanted Hong
Kong to do, Mr. Stans asked whether a bilateral arrangement
would be acceptable. Sir J. Cowperthwaite said this was
not the case though they would be prepared to consult about
a particular problem under GATT. He asked what sort of
case Mr. Stans had in mind for discussion and Mr. Nahmer
mentioned woollen knitted outer wear and in particular
women's woollen sweaters where imports accounted for about
46% of consumption.
The position in regard to m.m.f. sweaters
was similar. US production of sweaters was declining and
producers of these products were suffering a decline in
profits after tax. Imports had increased significantly
in recent years, (he gave figures), and there had been
89 bankruptcies in textile concerns in 1967/68.
Would
Hong Kong be prepared to negotiate over this situation?
Sir J. Cowperthwaite said that as Mr. Stans had indicated
at the outset this was not intended to be a negotiation and
/ he was
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