TNAG-0165-FCO40-201-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 34

0003230

G.F. 323

CONFIDENTIAL

- 3 -

7.

In his reply Baron de Geer said that the aim of the Swedish Government was not the protection of the textile industry as such. Their worry was that production had continued to decline and had resulted in quite a number of people being out of work, especially in the more remote areas. That unemployment created other serious social problems and accordingly the Swedish Government felt obliged to take strong measures to protect certain sections of the Swedish textile industry. He added that Sweden was a neutral country which had to be able to provide everything for herself, and thus she could not exist without her textile industry. He said that recently a Royal Commission was appointed in Sweden to inquire into the matter. The Commission had already declared that the textile industry was below the minimum level for defence purposes. Consequently this was an unique situation in Sweden. He also stated that there was also a trade deficit aspect to this problem as the value of Swedish imports from Hong Kong had increased from Kr. 144 million in 1967 to Kr. 159 million in 1968 whereas Swedish exports to Hong Kong had decreased from Kr. 34 million in 1967 to Kr. 32 million in 1968. The visible Swedish deficit in its trade with Hong Kong had therefore increased from Kr. 110 million in 1967 to Kr. 127 million in 1968.

8.

Baron de Geer then stressed that Sweden only wanted to take action in a non-discriminatory, fashion, adding that Hong Kong was in a very favourable position. In synthetic woven shirts, for example, both Yugoslavia and Korea were already under restraint, but Hong Kong was not.

This was part of the reason for the Swedish Government's request to Hong Kong to suspend further issue of E/As. The aim of the Swedish Government in seeking consultations was to extend the temporary restrictions to all low-cost countries in respect of any product where certain of those countries were already under restraint. The object was to avoid discriminating against any individual supplier.

He added that Sweden was not a protectionist country and claimed that Swedish imports of textiles from low-cost countries was higher, per capita, than any other country in the world:

Country

Per capita in US$

Sweden

9.44

Britain

5.2

Canada

3.7

U.S.A

2.8

West Germany

2.2

Austria

1.6

Belgium

1.3

Italy

0.5

Yugoslavia

0.3

:

France

0.3

9.

Baron de Geer then suggested that the negotiations might be in three parts:

(i) to consider extending the restraint agreement on

cotton items;

(ii) to consider extending the existing restraints on

non-cotton items;

(iii) to consider transferring the three non-cotton itens*

from Export Authorisation to restraint.

CONFIDENTIAL

/He