TNAG-0172-FCO40-208-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 154

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mara {j, man."

AND COULD THEREFORE ONLY LOSE, THEY NOW COMPRISE NEARLY 25 PER CENT OF HONG KONG'S TOTAL COTTON TEXTILE EXPORTS TO BRITAIN (F) HONG KONG'S OVERALL SALES OF COTTON TEXTILES TO BRITAIN IN TERMS OF YARDAGE COULD POSSIBLY HOLD UP, BUT EARNINGS FROM SUCH SALES (E PECIALLY NET EARNINGS AFTER DEDUCTING THE COST OF IMPORTED MATERIALS AND TAKING ACCOUNT OF THE TARIFF) WOULD CERTAIN-

LY FALL SEMI COLON

(G) THE PATTERN OF COTTON TEXTILE EXPORTS TO BRITAIN WOULD THUS SHIFT TOWARDS GARMENTS AND AWAY FROM FABRICS AND THE PRICES REALISED

NET OF TARRIFFS WOULD BE GENERALLY LOWER (C,F. OUR POSITION

IN U.S. AND GERMANY ? SEMI COLON

(H) THE POSITION WOULD BE WORSE IF CATEGORISATION LIMITATIONS ✓ PREVENTING GARMENT EXPORTS EXPANDING AT THE EXPENSE OF FABRICS

WRE RETAINED FOR ANY LENGTH OF TIME. IT WOULD ALSO BECOME

LORGE IF, AS SEEMS TO BE ENVISAGED IN THE REPORT, QUOTAS WERE REIMPOSED SELECTIVELY ON THOSE ITEMS WHERE HONG KONG WAS GAINING IN QUANTITY IF NOT IN VALUE) WHILE NO ACCOUNT WAS TAKEN OF HER

LOSSES.

9. AS REGARDS (H) AVOVE, I SHOULD ADD THAT. I WOULD UNDOUBTEDLY BE UNDER SEVERE PRESSURE HERE TO RESUME UNRESTRICTED COTTON TEXTILE EXPORTS TO BRITAIN IF A TARIFF ON COMMONWEALTH COTTON TEXTILE PRODUCTS WERE INTRODUCED WITHOUT THE (UNDERLINE NEXT WORD) IMMEDIATE REMOVAL OF QUOTA RESTRICTIONS. UNOFFICIAL ADVISER ON MY TEXTILES ADVISORY BOARD HAVE TAKEN THE VIEW THAT THE CLAUSE IN THE 1962 UNDERTAKING RESERVING OUR RIGHT

TO SEEK MODIFICATION OR CANCELLATION OF THAT UNDERTAKING SHOULD IMG IMPOSE IMPORT DUTIES ON IMPORTS OF COTTON TEXTILES

OF HONG KONG ORIGIN STILL HOLDS GOOD IN THAT THE PRESENT

HEADS OF AGREEMENT REPRESENT SPECIFIC MODIFICATIONS OF PREVIOUS

AGREEMENTS. WHETHER THIS VIEW IS RIGHT OR WRONG THE FACT THAT

IT IS STRONGLY HELD COULD FAN THE FLAMES OF A FIRST CLASS LOCAL

OUTBURST WHICH WOULD UNDOUBTEDLY ALSO FEED ON THE FUEL MENTIONED

IN PARA, 2 ABOVE.

SIR D. TRENCH

PILES

COMMODITIES D.

H.K.D.

TR. POL. D.

SIR A. UNELLING MR. GALLAGHER

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