TNAG-0243-FCO40-279-Conduct-of-Hong-Kong-commercial-relations-1973 — Page 97

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in the United Kingdom market and on individual lines of

production in both the United Kingdom and Hong Kong. These

arrangements (the "Lancashire Agreement") were later embodied

in an inter-governmental agreement known as the "Heads of

Agreement". Thus since 1959 imports from Hong Kong of woven

cotton textiles (including cotton clothing) have been subject

to quantitative restrictions in the United Kingdom market and

since then imports from all other developing countries have been

brought under control. Knitted cotton textiles, principally

under-garments, sweaters and leisure shirts are not subject to

quota. (Non-cotton textiles are also free of quantitative

restrictions from all sources except the Sino-Soviets and

Japan and we plan to liberalise Japan within the next two or

but goods containing more than 5% three years);put geoas containing more than by weight

of man-made fibre are subject to a tariff.)

7.

International trade in cotton goods is governed by a

multilateral agreement called the Long Term Arrangement on

Cotton Textiles (LTA) which was negotiated in 1962 within the

framework of GATT. The LTA permits exporting and importing

countries to conclude bilateral agreements for restraint of

trade in cotton goods. The United Kingdom accepted the LTA

on behalf of Hong Kong, and with our approval Hong Kong has

negotiated such agreements with all importing countries. The

countries party to the LTA are members of the Cotton Textiles

Committee of the GATT. This Committee, in addition to being

concerned with the administration of the LTA, undertakes

studies on trade in cotton textiles and keeps the operation of

the LTA under regular review. Hong Kong's representatives attend

meetings of the Cotton Textiles Committee as members of the UK

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