TNAG-0156-FCO40-192-Export-of-textiles-to-Australia-1989 — Page 44

0003230 G.F. 323

CONFIDENTIAL

Ref. CR EIC 891/5/11

C8.3/1/38100/53,

"Hongaid hondar

CAB/46

MEMORANDUM FOR THE COTTON ADVISORY BOARD

Export of Cotton Textiles to Australia

Request for Restraint on Exports of Drills, Denims, Dungarees and Jeans

Introduction

At the 200th meeting, Members were advised that consultations on the Australian request, reported to the Board in CAB/451 and CAB/453, were to take place with an Australian representative at the end of April. The consultations were actually held on 1 and 2 May 1968. The Australian representative was Mr. William Callaghan, Head of the Office of Secondary Industry, Department of Trade and Industry, Canberra. The Hong Kong side was led by Mr. D.H. Jordan, Deputy Director, assisted by Mr. W. Dorward, Assistant Director, of the Department.

The Consultations

2.

Mr. Callaghan said that the Australian case for restraint was based entirely on what he claimed was an actual threat of market disruption. This had arisen because, in this particular protected sector where a 55% tariff barrier existed, there had been an understanding that Australian garment manu- facturers would not buy from abroad and that Japanese suppliers would not push sales. Recently an Australian manufacturer and a Japanese supplier had broken ranks, and a contract for 2 m. sq. yds. had been placed for delivery over eighteen months. Other garment manufacturers had said that unless the Australian Government took action to prevent this diversion of trade they would in their own interests have to buy from Japan or Hong Kong at lower prices than the Australian weavers could quote. The Australian Government had already invoked the C.T.. against Japan and the Japanese had made it clear that they would not be willing to restrain their exports unless action was also taken to ensure that Hong Kong could not take the trade that would be denied to them.

3.

Mr. Callaghan emphasised that Australian policy deliberately reserved only 15% of the Australian textile market for domestic production everyone was free to compete outside that sector but that in that sector the portion of Australian industry now threatened represented 40% of productive capacity.

4.

He said that if Hong Kong would not restrain exports the Australian Government would have to refer the case to the Special Advisory Authority for temporary, non-discriminatory protection pending a Tariff Board reference; or impose restrictions against Hong Kong under Article 3 of the C.T.A.

5.

In response Mr. Jordan first pointed out that the figures in the Australian request indicating heavily increased imports from Hong Kong in 1966/67 as compared with 1965/66 were disproved by Australian import clearance figures provided later. In fact there was no discernible difference in the levels of imports from Hong Kong in those two years.

CONFIDENTIAL

/He then