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S. Stewart. Esq. M.C.
7.
5th September, 1969.
Finally, your third set of figures show items in respect of which the U.K. is Hong Kong's biggest, or second biggest, market in 1968. I cannot say that this alone really provides any indication of market disruption. What I do note, however, is that the majority of the items you quote are cotton and that most of the others are wool. There are only a very few m.m.f. items, mainly underwear and what I take to be children's anoraks. However, as I said, I doubt whether very much can be made of this particular information.
8.
My conclusion from all this is that your "case' against Hong Kong is based entirely on addig together cotton and non-cotton figures - when in every instance they are heavily concentrated on cotton - and adopting a ›"one market" concept. This, as far as we are concerned,
is out of court on several counts. First, Hong Kong's exports of cotton garments have been under restraint at the same level since 1962. Apart from 1% growth in the laat two years the only changes have been to increase the degree of categorisation. I agree that long Kong holds about 60% of U.K. imports of cotton garments but this is a 'situation which has now existed for a decade or more, it
is built into the system and it is covered by a restraint arrangement. Indeed, the large share of the U.K. cotton textile market held by imports from the Asian Commonwealth as a whole is a long standing affair, based on free entry and Commonwealth preference and pre-dating the L.T.A.
9. In the case of m.n.f., on the other hand, there has always been a relatively high tariff and the small element of Commonwealth preference has been hardly worth claiming. Furthermore, as imports from EFTA have entered auty free since 1966, there has been a considerable reverse preference operating against Hong Kong for some yours. The result has been that llong Kong has made very little impact on the U.K. m.m.f. market and her penotration in this sector has been less than in her other major markets, mainly the U.S., Canada, Germany, Sweden and Norway. I would therefore strongly refute the contention you have put forward that Hong Kong has been disrupting the U.K. market for m.m.f. garments and that only the U.K's "obligations" to a dependent territory has prevented action being taken against her. This is not borne out by the figures and will, I hope, be withdrawn.
10. In the case of woollen (and acrylic) knitwear, again, Hong Kong's penetration of the U.K. market has been significantly less than has been the case in markets such as Germany, the Scandinavian countries, Austria and even the United States. This is probably largely due to the fact that U.K. industry in this sector seens, most refreshingly, to be more competitive than that of most other developed countries.
11. I leave to the last the most disturbing aspect of what you said. As I understand your argument over the past weeks you contend that the "one market" concept is now the only valid one to adopt and that it is now no longer realistic to separate cotton from n.n.2. On this
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