TNAG-0244-FCO40-280-Exports-of-textiles-from-Hong-Kong-to-USA-1970 — Page 210

CONFIDENTIAL

CYPHER/CAT A

IMMEDIATE HONG KONG

IMMEDIATE HONG KONG TELNO.1

CONFIDENTIAL

NEUTRAL

TO FOREIGN AND COMMONWEALTH OFFICE

TO WASHINGTON, 2 FEBRUARY 1970

ADDRESSED WASHINGTON TEL. NO. 1 OF 2ND FEBRUARY RFI FCO.

YOUR TEL. 305 TO SECRETARY OF STATE.

TEXTILE IMPORTS.

2.

LAST

R F.

I

THIS IS NOT THE FIRST THE U.S. GARMENT WORKERS HAVE ATTEMPTED

IN 1965 AN TO INTERFERE WITH IMPORTS OF HONG KONG GOODS. UNSUCCESSFUL ATTEMPT WAS MADE TO INTERFERE WITH TRADE THROUGH THE INVOCATION OF AN ILO CONVENTION AGAINST HONG KONG AND IN THE SAME YEAR MR. POTOFSKY HIMSELF VISITED HONG KONG.

3. I WOULD SUGGEST THAT YOUR APPROACH SHOULD BE TO INDICATE TO THE UNION REPRESENTATIVES THAT, SINCE HONG KONG IS DEPENDANT FOR ITS EXISTANCE ON EXPORTS, AND THEREFORE THE COST OF PRODUCTION MUST BE TIED TO THE PRICE WHICH CAN BE OBTAINED FROM IMPORTING COUNTRIES, THE PRESENT IMPOSITION OF A TARIFF ON HONG KONG GOODS MUST BEAR MUCH OF THE RESPONSIBILITY FOR ANY TENDENCY FOR WAGES

IN A IN HONG KONG TO BE SUBSTANTIALLY BELOW THOSE IN THE U.S. TERRITORY WITH NO RAW MATERIALS AND RELATIVELY LOW CAPITAL RESOURCES, AT A DISTANCE FROM ITS MARKETS, ACCESS TO WHICH IS AFFECTED BY TARIFFS, IT IS LITTLE WONDER THAT WAGES MUST BE RELATIVELY LOW. IN THIS CONTEXT, HOWEVER, YOU MAY ALSO WISH TO POINT OUT THAT THE WAGES OF GARMENT WORKERS IN HONG KONG COMPARE MOST FAVOURABLY WITH THOSE IN ALL OTHER ASIAN COUNTRIES EXCEPT

THE JAPAN, AND ALSO WITH THOSE IN MANY EUROPEAN COUNTRIES. FOLLOWING STATISTICS OF WAGE INCREASES IN HONG KONG OVER THE LAST 12 YEARS ARE OF INTEREST IN THIS CONNECTION:

CONFIDENTIAL

/1958

RECEIVED IN REGISTRY No.51 -3 FAR 1970

HKKG/204/1

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