TNAG-0149-FCO40-185-Cotton-textiles-to-France-1969 — Page 152

0003230

G.F. 323

because of

-

CONFIDENTIAL

- 2 -

(i) the greater competition within the Common

market after the elimination of intra- Community tariffs on 1st July; and

(ii)

a further decrease in protection resulting from the implementation of the first two steps of the tariff reductions in the Common External Tariff agreed in the Kennedy Round which also come into effect on 1st July.

There was no possibility. moreover, for major liberalisation of any textile items because production in the French textile industry had declined in 1967 by 9% on 1966 following a decline in consumption. They also referred to the French negotiations with Japan (for a three-year trade agreement retrospective to 1st July 1967) which had been stalled because of the small increases in quota (9% as opposed to 11% accorded to Hong Kong for 1968) that France could afford to grant. Taking all the above factors into consideration, the French officials concluded that there was little scope for liberalising Hong Kong's trade with France this year.

The French officials then turned to specific discussions on each item still subject to quota control. They began each time with an offer which was discussed against the background of -

(i)

access rights for other suppliers;

(ii)

total French imports; and

5.

(iii) Hong Kong's global exports of the items

concerned.

Details of the resulting 1968 quotas compared with those for 1967 are attached. In sum, the main concessions made by the

French were

-

(i)

and (ii)

the liberalisation of two items and two parts of items woven silk fabrics, imitation jewellery, women's undergarments other than cotton and still cameras;

an increase of some new Fr. 1.01 million (plus 2,000 pairs of rubber footwear; 35,000 umbrellas; and 2,000 radios) spread over nineteen items. There were no increases for preserved fruit, woven fabrics of artificial fibres and knitwear other than cotton.

Hong Kong's Position

6.

Mr. Miller had the following comments to make on the French proposals

(i) with respect to liberalisation, the French

treatment of Hong Kong was inconsistent; Hong Kong was restrained in items where there was substantial export potential while Hong Kong's weaker competitors were liberalised (e.g. torches); yet there was no liberalisation for Hong Kong's exports to France in those items where much stronger competitors had to be restrained e.g. crockery;

/(ii)

CONFIDENTIAL