TNAG-0163-FCO40-199-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 60

Note of Meeting

Baron de Geer, accompanied by kr, A. Faltheim of the Swedish Embassy in London, called on Mr. Goldsmith on 20th March. Kr. Kemis and Miss Elliott were also present.

2. After a brief discussion of generalised preferences, Baron de Geer turned to

He said that the Swedes the question of Hong Kong's exports of textiles to Sweden. had arranged to go to Hong Kong on 20th April to discuss their agreements on cotton And non-cotton textiles and clothing. The position in the Swedish textile industry was getting worse, and they wanted to extend the existing agreement for a Further period. They did not propose to ask for export restraint on any non-cotton items apart from those already covered by restraint agreements, i.e. anoraks and jumpers of wool and mu 1. Laron de Geer handed over a copy of a memoranduz (attached) which had been sent to liong Konɛ. They would be sending more detailed statistics to Hong kong next week, and copies of these would be sent to us through our Embassy in Stockholm. These figures might not include Swedish production i̇ figures for the last quarter of 196c, but these figures should be available by 20th April. · Production Figures for the first quarter of 1969, however, certainly would not be available by this date they would probably not be so before May or June.

-

3. Kr. Goldsmith said that, as rerds cotton textiles, we left Hong Kong free to make her own arrangement under the CTA. ilon-cotton textiles, however, were a different matter. The Swedes were already aware of the problems we saw in relation to any agreements by Hong Kong to restrict exports of textiles other than cotton. ne ourselves did not restrict import of textiles from any source except under the CTA.; it was difficult to defend to our own industry & position wi.ereb we allowed Hong Kong

for whose overseas trade arrangements we had some responsi- bility to restrain her exports to other countries, while refusing to place any restrictions on our own non-cotton imports from Hong nonɛ. Although by a historical accident there was a preferential duty on imports off from the

There was also Commonwealth, wool as well as cotton textiles entered duty free. the problem of how European countries could counter possible American moves towards protection for textiles, which might be applied against Europe as well as against the more obvious "low-cost" suppliers, if at the same time European countries were themselves extending restrictions outside the field of cotton textiles.

It

Mr. Goldsmith went on to say that we should take a close interest in any

our attitude discussions between Hong Kong and Sweden on no-cotton textiles; would be influenced by the

detailed statistics which the Swedes mere going to produce. We should pay particular attention to evidence both of any increase in imports from Hong Kong and of any decline in Swedish production. If we were going to persuade our own industry to accept that Swecen should restrict Hong Kong imports while we did not, we should have to show them that saturation of the Swedish market was much worse than that of our ozn. might be necessary for the talks beginning in Hong Kong on 20th April to be confined mainly to cotton goods. We had not yet decided whether the U.X. could accept the Swedish proposal to seek an extension for a further period of the existing restraints, but we might be able to reach a decision before 20th April. It was not yet decided whether the Eoard of Trade would wish to have a representa- tive at any discussions on non-cotton textiles, or whether they would be content to be kept in touch by telegram.

5. Farc de Geer said that the Swedes would be willing to continue talks with Hong Kong on non-cotton items in Kay, preferably in Europe. But they could not finalise any agreement on cotton goods without a settlement on the non-cotton items, although they could reach an agreement in principle.

6. On the general question of the C.T.A., Baron de Geer said that the Swedish Government would strongly support any proposal to have the greecent extended to all textiles, possibly by means of an extension of the "substitution" clause.

In his opinion, cotton and am f goods were now indistinguishable for practical purposes, 1.e. to the consumer. He agreed that it would Be difficult to reconcile such an extension of the C.7.A. with the obligations of developed countries under Part IV of the GATI, but they must consider the position of their own textile industry. Article XIA of the GATT was of no help because it must be applied without discrimination to all contracting parties.

/7.

Page 60Page 61