TNAG-0245-FCO40-281-Exports-of-textiles-from-Hong-Kong-to-Sweden-1970 — Page 101

000,3230

G.F. 323

CONFIDENTIAL

33-

Final Session (Plenary) 2.30 p.m. Thursday 30th April 1970

173.

Mr. Ho opened the session by asking Baron de Geer to say whether he wished to comment further on the position reached so far in the present round of consultations. Baron de Geer observed that the area of disagree- ment appeared to be even wider than in previous negotiations with Hong Kong. He reiterated that Sweden was worried over the damage being caused to Swedish industry by the continuing increase in textile imports, which the present restraints were unable to halt. He had to ask for further restraint and was concerned that Hong Kong did not seem to be as willing to co-operate as before. Mr. Ho commented that whenever any item of textiles was put under restraint, there was often a tendency for the restrained country's share of the normal market growth to be taken up by other suppliers. This reflected a lack of competitiveness in certain sectors as far as domestic industry was concerned, a situation unlikely to be bettered by an intensi- fication of restraints from only a few sources.

174. Mr. Ho handed over to the Swedish delegation five tables of newly produced Hong Kong export licensing statistics for the period up to March 1970 in respect of the new non-cotton items described below:-

(a)

knitted shirts of synthetic fibres (ex 841.832)

(b)

knitted undergarments of continuous man-made fibres, m & b (ex 841.841)

(c)

knitted sweaters etc. of continuous synthetic fibres, m & b (ex 841.863); w & g (ex 841.866)

(a)

slacks, jeans and trousers of discontinuous synthetic fibres, m & b (ex 841.719);

w & g (ex 841.748)

(e)

woven night garments of discontinuous synthetic fibres, m & b (ex 841.772)

These indicated that in four of the five items there had been a surge of exports in the late autumn and early winter of 1969 and Mr. Ho asked if Baron de Geer could account for this spate of Swedish purchasing. Baron de Geer said that he could not account for it, but he did not think it was due to Swedish importers getting wind of the probability of the current request for export restraint.

175.

Mr. Ho then read out the statement of Hong Kong's position attached as Appendix II to this record.

176.

Referring to Mr. Ho's statement on Hong Kong's G.A.T.T. rights, Baron de Geer said that Sweden had always been willing to negotiate with other countries under the principles of the G.A.T.T. and the Cotton Textiles Arrangement. Since he had to be absolutely clear of Hong Kong's intentions, he suggested that Mr. Ho's statement be examined in detail to avoid any misunderstanding. However, before going further, he wished to question Mr. Ho's remarks regarding Hong Kong's practice of free trade. Baron de Geer felt that trade and commerce included air transportation. He noted that, in this respect, Scandanavian Airlines System (S.A.S.) still had no landing rights in Hong Kong. He asked that his government's concern in this matter be brought to the notice of H.M. Government in the United Kingdom. In this situation, he concluded, it was not entirely correct to say that Hong Kong practised complete free trade. Mr. McEnery undertook to convey Baron de Geer's comments to H.M.G. in the United Kingdom.

/177.....

CONFIDENTIAL