TNAG-0156-FCO40-192-Export-of-textiles-to-Australia-1989 — Page 68

Mr. Stewart

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Please see Canberra telegram no. 5 to Hong Kong at (1). This is concerned with a call from the Australians for consultations over Hong Kong textile imports, which they claim are rising too far above an "agreed limit" of 1.5 million square yards.

2.

Last May the Hong Kong and Australian Governments initialled an Agreement that

3.

(a) both Governments would henceforth keep the trade under close surveillance;

(b) if there was evidence to indicate that the volume of such imports was increasing and that the major Australian users intended to continue a policy of using such fabrics imported from Hong Kong at an increasing level to the detriment of Australian pro- ducers, both Governments would be ready to consult urgently under the terms of Article 3 of the GATT Cotton Textiles Agreement.

The Australians have now acted under the terms of (b). I have, however, been through the file and can find no reference whatsoever to any "agreed limit"; it is certainly not mentioned in the agreed memorandum. There is also a quibble over the precise meaning of cotton textiles in the context of the Australian request. From the file it appears that the textiles concerned do not cover as wide a category as the use of the term suggests only cotton drills, denims, dungarees and jeans, all falling within paragraph 55.09.49 of the first schedule of the Australian Customs Tariff.

4. I think perhaps we should await Hong Kong's reply to Canberra's telegram before taking any action. Essentially this whole case falls within their area of competence and, at least for the present, our role will probably be that of spectators. We could perhaps ask Canberra for a copy of the Australian note, although I doubt if the telegram has left out anything of importance. Further, as the Australians have suggested that Hong Kong takes advantage of the presence there of Mr. W. A. McKinnon, Deputy Secretary of the Department of Trade and Industry, on 24 and 25 April, I doubt if we have sufficient time to become fully acquainted with, and weigh in on, this matter. We can probably expect to hear something from Derek Jones in Geneva, as the Australian Government have already notified the CTC of their request for a resumption of consultations.

16 April, 1969

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(I. R. Murray)

Hong Kong Department

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