TNAG-0154-FCO40-190-Exports-of-cotton-textiles-to-Canada-1970 — Page 19

Note of a meeting held at the Board of Trade on

Thursday, 4th September, 1969 at 11.30

125

Those Present:

Mr. S. Stewart

B.O.T. (Chairman)

Mr. D. J. C.

Mr. D. Sellers

Jones)

Hong Kong (Part only)

Mr. W. S. Carter

P.C.O.

Miss J. E. Elliot)

B.O.T.

Miss S. M. Reid)

The purpose of the meeting was to discuss with Hong Kong officials the statistical background to Canadian claims of injury on shirts, blouses and trousers resulting from imports from Hong Kong; and to discuss tactics for the negotiations with the Canadians.

Mr. Stewart explained that his object at this meeting was to outline for the Hong Kong Government the 3.0.T.'s view of the frame-work of international commercial policy, within which the Hong Kong/Canada negotiations were being conducted. This meeting could not deal with the constitutional problems which Hong Kong had raised, since these were handled by the P.C.0.

There was an exhaustive discussion of the interpretation of the figures, during which a difference in methods of approach was revealed: the B.O.T. favoured using a one-market approach i.e. looking at the total market for a particular garment rather than look separately at garments of different fibre types or garments made by different processes. The B.O.T. also placed greater emphasis on consumption figures in their interpretation than the Hong Kong

The position representatives, who were more concerned with import penetration. which Hong Kong would adopt in negotiations with the Canadians would in her view be more concerned with the immediate, short-term problems of keeping the trade in textiles between Hong Kong and Canada flowing and increasing, than with the long- term problems with which the B.O.T. 1s currently concerned over international policy in textiles.

Inter alia Mr. Stewart thought it was now rather less likely that the Cana- dians would impose a penal surcharge on Hong Kong garments, since he had recently heard that Rodney Grey was viewing the position not as requiring penal surcharge action, but as being rather better handled in the GATT under Article XIX, and that any action taken under that Article would have to be non-discriminatory. Discussion of the figures for each garment emerged as follows:

Shirts

3.0.T.'s View

Mr. Stewart thought that for shirts the Canadians should be very closely ques- tioned on the relevant figures, since from the information available, the B.O.T. had difficulty in accepting the Canadian claim of injury to their manufacturers. Adopting the one-market approach, as had been done in the case of Sweden, the Cnaadian case began to look rather thin. Calculations had been done for the woven shirts market, but as no recent figures for knitted shirts had been made available (because they are damaging to the Canadian case?) we had been unable to do more than estimate the total market position at this stage. However, on woven shirts, where we had a reasonably complete picture, the trend from 1966 to 1968 showed a fall in production and an increase in both imports and consumption. The increasing imports were largely being absorbed not at the expense of the domes- tic manufacturers, but were going into consumption in response to an increase in demɛnd; this would not constitute a market disruption situation. The Hong Kong

1.