TNAG-0154-FCO40-190-Exports-of-cotton-textiles-to-Canada-1970 — Page 21

the restraints were being evaded, but Hong Kong was happy that, with over 50% of imports, she had a fair share of the market. In response to Mr. Stewart's sugge 3- tion that the Canadians should also take this case to the GATT and try for an Article XIX decision in their favour against Hong Kong, Mr. Jones said that he could

pt accept that with falling exports in 1968, Hong Kong could be said to be the cause

injury. He went on to suggest that, in the case of blouses and shirts, the knitted and woven types were not produced in the same factories, in contrast to practice elsewhere, and for this reason it would not be valid to examine the case for injury on the basis of blouses of all fibres, woven and knitted, as had been done in the Swedish case. They would consider only woven blouses, since they had learned in Canada that it was only the factories producing woven blouses (and shirts) that were in jeopardy. The same criteria for arriving at a level which might be taken to con- stitute injury could not be applied to all situations, as industrial practice might vary quite considerably. Hong Kong's position was to agree to continue the exist- ing restraints and go for as much growth as possible.

B.O.T. View

Mr. Stewart explained that, as before, the B.O.T. view was that the total market should be considered, particularly since the garment manufacturers use the different materials indiscriminately. By adopting a different method of approach on blouses, and studying only the figures for the woven markets, the Hong Kong team were laying themselves open to charges of inconsistency. In the absence of production figures for knitted garments, and also for woven blouses and trousers, up to the time of this meeting, the Board had, perforce, been obliged to work with the figures for woven garments. When the knitted figures were available, the case could be re- examined. The figures showed that over the years 1966 to 1968, production was falling in total and for both fibre types, consumption had fallen from 1966 to 1967, with a rise in 1968, but in neither case by very much, and imports had risen from 1966 to 1967 and had then levelled off. The trend of Hong Kong's share followed that of the market as a whole and that of imports. If Hong Kong wished to adopt a fibre-by-fibre approach, the significant feature was that non-cotton imports and consumption had increased over the 3 years, but that Hong Kong's share of both had risen and then fallen back in 1968. Imports from Hong Kong had also fallen subatan- tially in the first five months of 1969. It was evident that as a traditional importer into Canada, Hong Kong would have a relatively high level of imports, Japan was the leader here and had a faster growth rate, despite being under restraints. The restraints were clearly being evaded, In the case of Hong Kong, restraints of 40,000 doz. on polyester/cotton blouses covered only one quarter of the m.n.f. irports, and overall more than half of the Hong Kong imports were not controlled. Surely there was a case here under the GATT for removing restraints, in compliance

Dis- with the obligation to remove any restrictions to trade as soon as possible? ruption, if it could be found to have existed at all, occured in 1967 and it was quite obvious from the figures that there was no causal connection between a fall in production and an increase in imports; again there was a parallel situation with Swe- den, where a fall in consumption had not been taken then to constitute injury. Canadians did not have a case on blouses, and by the same token, neither had the U.K.

The

Hong Kong's Views

Trousers

A new cotton quota had just been agreed allowing 1% growth and 12 swing:

of which

280,000 dozen cotton

140,000 dozen children's

140,000 dozen men's and women's

55,000 dozen polyester/cctton

Mr. Jones foresaw that Hong Kong could export some 600,000 dozen trousers to Canada next year-280,000 cotton, 55,000 polyester/cotton and say 250,000 polyester/polynosic, because he thought that if the Canadians got their way with polyester/polynosic

3.