Memorandum
82/E
With reference to Article XXII of the General Agreement on Tariffs and Trade (GATT) and Article 4 of the Long-Term Arrangement regarding International Trade in Cotton Textiles, Sweden requested in April, 1968 consultation with Hong Kong in view of the rapid increase in Swedish imports of knitted goods and ready-made clothing from Hong Kong. After consul- tations lasting throughout the summer months, measures were introduced to control the Hong Kong exports to Sweden of certain textile goods.
The Swedish Government stressed at the time that the textile industry in Sweden was facing great difficulties due to a necessary process of rationalization and structural reform. The situation was aggravated by the additional strain of an excessive and simultaneous increase of low-priced textile imports (mainly knitted goods and ready-made clothing) with the result that unemployment in the textile sector threatened to get out of hand.
Against this background, the Government considered it necessary to adopt temporary measures in order to get the development under control. For this purpose negotiations were initiated with certain countries to reach agreement on temporary export limitations on low-priced textile goods to quantities that could be considered more normal.
This was not an easy decision to take because Sweden has always tried to apply a very liberal trade policy. Among all nations of the world, Sweden is probably having some of the lowest ta- riffs and the country has less quantity restrictions than most other industrialized areas. It should be stressed that this policy was not changed by the action taken by the Government on textile imports. Sweden still considers it right and proper to import those products which can be more favourably produced abroad, and firmly believes in the advantages of an internatio- nal division of labour.
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