TNAG-0163-FCO40-199-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 197

1.

Telegram to Hong Kong

to be repeated to the U.K. Mission, Geneva and to Stockholm

Your Telegram No. 81

Our comments on the line which you propose on the three items

to be discussed with the Swedes in Geneva on February 5th, are as

follows:-

2.

Item 462

We agree with your assessment, subject to the point that

trade in acrylics should also be taken into account. The question

of injury to the domestic industry should be related to outerwear of

knitted wool, and acrylics taken as a whole. It will depend on

whether there has been a change in the pattern of consumption.

On

the negotiating instructions in paragraph 3 of your telegram under

reference, we agree with your (a). Under (b) we should avoid any

suggestion that we expect any fresh consultations on extention of the

existing restraints. If you consider a second fall-back position

necessary, we suggest that it should be simply an offer to reopen the

question at any time if there is new evidence to consider. As regards

(c) we agree that in the last resort restraint on this item may be

conceded provided that figures for Swedish production and consumption

of mens and boys knitted outerwear, etc. in acrylic fibre show that

production of wool and acrylic garments together is declining in a

market that is stable or expanding. But if no such decline is taking

place then the decline in the production of wool garments arises

from substitution and cannot be attributed to imports from Hong

Kong. In this case, restraint on 462 should not be conceded.

3. Ex751

We agree the position on (a) but not (b) in your proposed

negotiating instructions. Consumption of anoraks in Sweden is

clearly booming and Swedish producers appear (on the most recent

production figures available to us) to have shared in the growth of

the market. Winter shipments from Hong Kong are presumably the

result of seasonal demand. We are not convinced by the substitution

argument in the absence of any information of what has happened to

Swedish production of male anoraks since you agreed to restraint.

/The