TNAG-0147-FCO40-183-Exports-of-textiles-to-United-States-of-America-1969 — Page 76

0003230 G.F. 323

I

CONFIDENTIAL

Enclosure 1

Note

The Hong Kong Government notes the United States Government's concern with the growth in textile and apparel imports generally. The Hong Kong Government also notes, however, from its study of published United States statistics, that in 1968 imports of man- made fibres were in quantity less than 4% of United States pro- duction and of total United States consumption, despite the 54% increase in total imports in that year. The rate of growth of these imports appears to have already moderated since total imports in the first six months of 1969 were 32% only above the level for the same perios of 1968.

2.

In 1968 imports from Hong Kong alone reached only .24% of United States production and .23% of consumption.

3.

So far as wool is concerned, the Hong Kong Government has noted that, while imports in 1968 increased by 28% to reach much higher levels than man-made fibre imports in relation to United States production (28%) and consumption (22%), total imports in the first six months of 1969 showed a decline of 5.7% as compared with the first six months of 1968.

In 1968 imports from Hong Kong alone reached only 4.6% of United States production and 3.7% of consumption.

4.

5.

In both man-nade fibre and wool, imports from Hong Kong appear in the first six months of 1969 to have taken a larger share of the total import market, at the expense of other suppliers, but this fact does not, in the Hong Kong Government's view, indicate that these inports are causing injury to United States producers.

6.

It is noted that the United States Consul-General's presentation included no suggestion of decline in production, sales, profits or employment.

7.

Hong Kong has not entered into a comprehensive bilateral agreement such as is now proposed with any other country. Its only comprehensive agreements were made in the context of the C.T.A., which the participating countries agreed was intended to deal with the unique problems of cotton textiles and not to be considered as lending itself to application in other fields.

8.

Hong Kong's existing export restraint arrangements in the field of non-cotton textiles are based on evidence of serious injury to domestic producers of the particular items concerned. No such evidence has been adduced in support of the present proposal.

9.

A new issue of principle would therefore be involved.

10.

In the light of the foregoing, the Hong Kong Government sees no good grounds at this time for the derogation from its G.A.T.T. rights that would be implied by acceptance of the United States Government's proposal to enter into negotiations for a comprehensive bilateral agreement on man-made and woollen fibre textiles.

/11.

CONFIDENTIAL