TNAG-0152-FCO40-188-Exports-of-cotton-textiles-to-Canada-1969 — Page 123

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G.F. 323

Encl. 7

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(e) Trousers, Slacks and Shorts

15.

As indicated in Enclosure 7, Canadian imports of slacks in 1968 increased overall by 17% when compared with that in 1967; Hong Kong's share of the imports dropped from 42% to 25%. (Figures contained in this enclosure include, shorts and women's slacks of fibres other than cotton). Canadian imports

of trousers of these fabrics from Hong Kong registered a drop of 28% in volume in 1968 compared with 1967. Hong Kong's quota utilisation in the current textile year for cotton trousers under restraint

is, however, running at a higher rate than the other

restrained categories, although it is still slightly below that of 1967.

Problems arising from the Cotton Apparel Agreement

16.

Apart from some minor classification problems there have been no difficulties experienced with the cotton apparel agreement this year.

Assessment

17.

It is difficult to assess, without Canadian production figures, whether the present state of the C-nadian market justifies the continuation of the Agreement on apparel. Based on Canadian import statistics, it can be demonstrated that Hong Kong's share of the Canadian import market for the four restrained cotton apparel categories has dropped from 34% to 26% between 1966 and 1968. It is likely that this drop has resulted from Hong Kong's agreement to restrain exports of these items, especially as quota utilisation in 1967/68 was very high (99.7%). It can therefore be argued that, on grounds of equity, there should be some improvement in the terms for any new agreement, especially as, except for 3% on nightwear last year, Hong Kong has had no growth on apparel since 1965 when it secured a 3% growth on the levels existing at that time.

Negotiating Instructions

18.

(a) First position

:

It is proposed that Hong Kong should seek ideally:

(a) 5% growth on the current limits and sub-limits

for the next quota year;

(b) increased swing from 12% to 15%, including sub-limits in Categories 1, 2 and 4(ii);

(c) 10% carryover; and

(d) 10% anticipation.

The proposed new limits for the year ending 30th September 1970 would then be:

/Category..

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