TNAG-0172-FCO40-208-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 151

CONFIDENTIAL

*

Техки

*

Textile Concil Jer

"Filey

36

CYPHER/CAT-A-

IMMEDIATE HONG KONG

TELEGRAM NUMBER 511

CONFIDENTIAL

YOUR TELEGRAMS 401 AND 419.

U.K. TEXTILE COUNCIL REPORT.

TO FOREIGN AND COMMONWEALTH OFFICE

27TH JUNE, 1969.

1

A DEFINITIVE ANALYSIS OF THE LIKELY EFFECTS ON HONG KONG OF THE

IMPOSITION OF A DUTY IN BRITAIN ON COMMONWEALTH COTTON TEXTILES

WILL NOT BE POSSIBLE WITHOUT CLOSE CONSULTATION WITH THE INDUSTRY

THROUGH THE TEXTILE ADVISORY BOARD. APART FROM INITIAL REACTIONS

WHEN THE REPORT WAS FIRST RELEASED, THE HONG KONG INDUSTRY HAS ADOPTED A WAIT AND SEE ATTITUDE IN VIEW OF UNCERTAINTY OVER HMG'S

VIEWS, ESPECIALLY WITH REGARD TO THE FUTURE OF QUOTAS.

2. AS REGARDS THE GENERAL PUBLIC THE ISSUE IS NOT A LIVE ONE AT

PRESENT, BUT POINT IN YOUR PARA, 3(A) COULD BECOME VERY IMPORTANT HERE. A TARRIF ON THE DEVELOPING COMMONWEALTH WITH CONTINUED FREE

ENTRY FOR SOME EUROPEAN COUNTRIES WOULD UNDOUBTEDLY BE MISREPRESENTED

AND WOULD PROVIDE A STRONG RALLYING POINT FOR COMMUNIST PROPAGANDA,

3. TO TURN TO MY OWN OBSERVATIONS ! THINK I SHOULD BEGIN BY POINTING

OUT THAT ANY ILLS WHICH HAVE BEEN SUFFERED IN THE LAST FEW YEARS BY

THE BRITISH COTTON TEXTILE INDUSTRY CAN HARDLY BE ATTRIBUTED TO

HONG KONG, OUR EXPORTS OF WOVEN FABRICS TO BRITAIN TOTALLED 115

MILLION SQUARE YARDS IN 1959 AND HAD FALLEN TO 100 MILLION SQUARE YARDS BY 1968. IF GARMENTS AND MADE-UPS ARE INCLUDED, THE HONG KONG FIGURE IN 1963 WAS VIRTUALLY UNCHANGED FROM THE EARLY 1960S.

HONG KONG WAS THE FIRST SUPPLIER TO RESTRAIN ITS EXPORTS AND THE FIRST TO SUBMIT TO CATEGORISATION (IN1964). THE CONTINUED DECLINE IN THE BRITISH WOVEN COTTON INDUSTRY IN RECENT YEARS HAS BEEN DUE (A) TO THE INCREASING USE OF MAN MADE FIBRES AND KNITTED GOODS AND (B) A CONTINUED INCREASE IN IMPORTS FROM PORTUGAL AND FROM UNRESTRICE ED SUPPLIERS, INCLUDING OTHER FTA COUNTRIES AND THE IRISH REPUBLIC. 4. IN THI CONNECTION, I CANNOT SEE HOW A TARRIFF ON THE COMMON- WEALTH ALONE CAN ASSIST THE BRITISH INDUSTRY IF IMPORTS FROM PORTUGAL ESPECIALLY (BY ALL ACCOUNTS A LOW COST SUPPLIER), AND ONLY TO A

RECEIVED IN

YN 51

CONFIDENTIAL

/LESSER

11C16/548/8

20