shirts, they might not press for a restraint on the polyester/polynosic trousers, despite the fact that the Canadians probably had a better Article XIX case here. The existing situation was one where imports accounted for 50% of consumption and Hong Kong had a high share of the import market. In 1967/68, Hong Kong had over- shipped the cotton quota by 100,000 dozen as a result of a swing from nightwear. Polyester/cotton shipments in 1968 were lower than in 1967, but there was a large increase in polyester/polynosic. This had made a nonsense of the controls. Agreement to continue the restraints on polyester/cotton was the only alternative to incurring a penal surcharge, since Canadian legislation does not provide for the imposition of quantitative restrictions,
B.O.T.'s View
The controls The Board did not accept the Canadian case against Hong Kong.
If there- were meaningless since between and of the field was uncontrolled. fore made little practical difference whether they remained on or were removed, but under the GATT they should be removed as being unnecessary. Hong Kong's share of imports was falling and again they were being overhauled by other nations. The U.S.A. was an interesting case, since they were accounting for a larger share of Canadian imports and consumption, albeit from a relatively low base, but in view of their proximity to the Canadian market, their potential as a large supplier to the Canadian market, particularly of branded jeans, should not be ignored. Levi Strauss, for example, would supply from the U.S.A. if it could not supply from Hong Kong.
The discussion on trousers, in particular had been severely hampered by the lack of data available to B.0.T. Mr. Stewart asked that in future the Hong Kong Office should supply B.0.T. with the relevant information in sufficient time to allow a case to be more fully prepared in future. When the Hong Kong Office were preparing a dossier on Norway, B.0.T. would like to have the figures as soon as they became availablo.
Conclusion
The B.O.T.'■ views had been stated, both on general commercial policy and on the tactics Hong Kong should adopt in negotiating. In the end, the Hong Kong representatives found themselves unable to reconcile their proposals with the B.O.T. view, and it therefore became a question of whether or not Hong Kong would This was of course a accept the U.K.'s constitutional right to exercise a veto. matter which would have to be discussed with the P.C.O.
Circulation:
Mr. S. Stewart Miss C. H. Welch Miss J. E. Elliott Mr. W. S. Carter
Mr. G. S. Whitehead
Mr. D. Sellers
Mr. D. J. C. Jones
Mr. D. Jordan
Mr. D. I. Dunnet
Industries 1
8 October, 1969.
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