TNAG-0162-FCO40-198-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 50

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34.

Messrs. Rønning and Engebrigtsen emphasised that there was a concentration of low priced imports from Hong Kong and that this trend was disturbing the local market and causing hardship to various sectors of the trade. It was noted that next to Sweden, Norway had the highest per capita consumption of Hong Kong ready made garments

Mr. Jordan denied that in the whole of Europe and North America. there was any attempt to concentrate and noted that non-cotton garments produced in Hong Kong were allowed free access into almost all markets

There was little incentive to and were merely supplied on demand. develop new markets when demand in existing ones maintained a high level. He argued that the overall figures did not support a case of market disruption and that the existing situation was the result of an enormous expansion in demand for ready made garments which had not

He been matched by a similar increase in domestic production. reiterated Hong Kong's willingness to consider restraint requests on a product-by-product basis if the Norwegian Government could produce a genuine case of market damage, but emphasised that, since Hong Kong had' m.f.n. rights under the G.A.T.T., there was no reason why it should not enjoy a large share of the market.

35.

At Mr. Haerum's proposal, further discussion on skirts, dresses etc. (item 841.736) was held in abeyance and the meeting went on. to consider synthetic blouses, jumpers etc. (item No. 841.739). Mr. Jordan noted that while Hong Kong had a large share of the market. domestic production was increasing apace although production of cotton blouses had declined. Mr. Rønning observed that production of cotton and non-cotton blouses had in fact remained steady. Hong Kong was displacing other suppliers in view of the marked difference in price which virtually ruled out competition from E.F.T.A. countries. Mr. Jordan thought that if price were the only factor, Hong Kong would have taken the whole market already. But there had been an increase in production, although imports generally took a large share of the Norwegian market.

36.

Mr. Haerum accepted that increased domestic production hand- in-hand with increased imports did not, in accordance with the normal criteria, constitute valid grounds for restraint. Nevertheless, he contended that large imports did hamper the development of the market, as far as the domestic industry was concerned.

37.

Mr. Jordan pointed out that the import figures indicated a

It larger increase in imports of cotton blouses than in synthetics. would appear that Norwegian manufacturers had lost out both to cotton blouses imported from sources other than Hong Kong and to increased imports of synthetic blouses Norwegian production of which had not increased appreciably. Mr. Engebrigtsen replied that the industry had been prevented from producing more synthetic blouses to compensate for the contracting production of cotton ones by the severe competition from low priced Hong Kong imports. Mr. Jordan, however, pointed out that the competition could not have been crippling since other suppliers

Costs were had managed to increase their share of the market. increasing and the industry was unable to meet them without expanding productions.

38.

Referring to Mr. Rønning's remarks that Hong Kong had switched from cotton to synthetics, Mr. Jordan noted that whereas domestic production in cotton had declined, there were large imports, the overall increase of which was greater than the production decrease, Given the decline in imports from Hong Kong, the conclusion to be drawn was that if the industry had sustained damage, this had been inflicted not by Hong Kong but by other suppliers. He further noted that the increase in imports of synthetic blouses from Hong Kong had been

/matched by

CONFIDENTIAL