Brief on Irish Textile Restrictions
Early in January 1965, the Government of Ireland introduced restrictions on the importation of all textiles (except woollen and silk yarns, woollen woven fabrics and carpets) and named Hong Kong among the sixteen supplier countries (listed in Enclosure 1) to which these restrictions would apply.
2.
The textile items under restriction fall into two categories. The first category (Quota No.51) consists of all yarns, clothing, bed linen and household made-ups. The import quota for 1968 for all sixteen territories is £100,000 and is allocated on a first-come-first-served basis, deductions from the quota being made at the time of entry of the textiles concerned. The second category (Quota No.52) consists of all woven and knitted piecegoods, whether grey or finished, the quota for 1968 being 12 million square yards; it is administered by import licensing in the normal way, although the basis on which licences are issued is not entirely clear to us. The quota levels for both categories have not been varied since their introduction early in 1965.
3.
Following correspondence between H.M.G. and the Hong Kong Government, an aide memoire was delivered to the Irish Government on 8th August, 1967. As the Republic was not then a G.A.T.T. member and did not, and still does not, participate in the Long Term Arrangement regarding International Trade in Cotton Textiles, Hong Kong had no legal grounds on which to challenge the Irish action. Nevertheless, the aide memoire protested against the discriminatory nature of the restrictions and the way the Irish were administering them.
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The Government of Ireland answered on 16th October 1967, stating that "in the general move towards the lessening* of protection it was necessary to safeguard the interests of Irish manufacturers against competition from countries where production costs were excessively low by Western European standards". They pointed out that there had been unused balances in Quota No.52, but admitted that the way they administered Quota No.51 could cause a reduction in imports from Hong Kong.
5.
As Ireland became a G.A.T.T. member on 22nd November 1967, H.M.G., on behalf of Hong Kong, presented a second aide-memoire to the Irish Government challenging the discriminatory import restrictions on the basis of G.A.T.T. rules, and requesting the removal of Hong Kong from the list of countries to which the restrictions apply. memoire was delivered to the Irish Government in February 1968 pointing out that the restrictions were inconsistent with Irish obligations under the G.A.T.T. and would further appear unjustified in practical terms in view of the unused balances.
6.
In their reply of 11th July 1968, the Irish Government side- stepped the G.A.T.T. issue, and instead argued their case on the basis of an (insignificant) increase in yarn and made-up imports from Hong
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