TNAG-0165-FCO40-201-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 11

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considerable problems arising from the large imports from Hong Kong in the

shirts and knitwear field and such an increase, owing to diversion, would

prejudice its position even further. Second, H.M.G. would be placed under

intolerable pressure from the U.K. textile industry to impose restrictions on

imports where its position was similar to the Swedish, Industries 1 wished,

if possible, to avoid such restrictive action but in the circumstances des-

cribed it would become impossible to resist such pressure any longer. They

did not feel that restraint on textile imports should be conceded where the

Swedes would not be able to establish a case under Article XIX of the G.A.T.T.

i.e. injury to (or threat of injury to) domestic producers.

Mr. Jordan said Hong Kong would not, of course, wish to enter into an agreement

which would cause diversion of their exports to the U.K. However, they already

had a restraint agreement with Sweden (and also with Norway and Canada) on

certain non-cotton items and he was not aware of any diversion of trade caused

by this agreement. If diversion had not occurred to date he did not feel it

was likely to happen now. In regard to only conceding restraints where the

importing country could show an Article XIX-type case, he pointed out that when

the present restraints on Hong Kong exports to Sweden were agreed in London in

1968, the Swedes did not have such a case. This year their case for restraint

was stronger.

able to.

Mr. Hughes asked if Hong Kong considered the Swedes could make out a case under

Article XIX if obliged to do so and Mr. Jordan said he thought they might be

What Hong Kong feared most about action under Article XIX was that

it might be applied in a discriminatory manner i.e. it might be presented' as

being in accordance with the non-discriminatory provisions of the G.A.T.T. but

would nevertheless be aimed at Hong Kong.

Mr. Stewart said he thought it would be very difficult for the Swedes to take

action under Article XIX without hitting other countries as well,. e.g. E.E.C.

Mr. Hughes