TNAG-0152-FCO40-188-Exports-of-cotton-textiles-to-Canada-1969 — Page 26

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Canadian/Hong Kong Textile Discussions

Your minute of 12th August.

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First, may I question whether C.R.E.1, or the F.C.O., would accep the arguments which you have put forward in your minute to justify the position taken up by Canada if the arguments had been put forward by us to justify restricting imports of polyester/cotton shirts into the U.K. This is not unimportant because U.K. imports of woven m.m.f. shirts from Hong Kong in the first six months of this year amounted to 49,639 do zen compared to a figure for the whole of last year of 32,254 dozen.

13. Article XIX would require the Canadians to establish that

imports of polyester/cotton shirts from Hong Kong were being imported in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive products. The Canadians, according to

Mr. Rodney Grey, considered whether the increase was due to unforeseen developments, etc. and concluded that it was: and I suggest that this proviso would not in fact give rise to any difficulty if a case were to be brought under Article XIX. However, we would argue on the merits of the case that :

a)

all shirts are like or directly competitive with each other. Canadian imports of woven shirts from Hong Kong actually fell in 1968, the increase in the trade in m.m.f. shirts having been more than offset by the fall in cotton shirts.

b) The Canadians cannot make out a claim that the

"polyester-cotton" shirt producers have/ignored injured by imports. Production increased from 242,063 in 1966 to 831,416 in 1968. It is important to note in this connection that the G.A.T.T. Decision of 19th December, 1960, embodied in the L.T.A. Record of Undertakings, excludes from the definition of market disruption any damage caused to domestic producers caused by "any change in consumer taste, technological advance, or similar factors".

c) Canadian imports of woven m.m.f. shirts from Japan

increased very rapidly in 1968 and went on increasing in the first five months of 1969. We were told by Lir. Rodney Grey in 1967 that the Japanese quota for polyester-cotton shirts would be fixed at 50,000 dozen (compared to Hong Kong's 75,000 dozen) but the figure which was conceded in 1968 was apparently 77,140 dozen. However, since Canadian imports of Japanese woven synthetic shirts amounted to 198,000 dozen in 1968, it

It is even seems doubtful if this ceiling was observed. more difficult to believe that any restrictions are in force for 1969 when Canadian statistics (which for the first time this year distinguish polyester/cotton shirts separately) show an import of 16zxnx 168,000 dozen Japanese polyester/cotton shirts in the first five months of 1969.

a) The fall in Canadian production of woven shirts was only

6 per cent between 1967 and 1968, and 15 per cent between 1966 and 1968. The corresponding figures for the U.K.

What increase has there were 15 per cent and 24 per cent.

been in Canadian production of knitted shirts?