0003230
G.F. 323
CONFIDENTIAL
- 5 -
(p) Woven Synthetic Discontinuous Nightgarments
4.
New Item No. 5
In commenting on the percentages Mr. Ho stated that Swedish production had obviously switched over to garments of cut and sewn knitted playsuits which were classified by Sweden as nightgarments, and referred to the increased production shown in the Swedish table for Group 1 - item 2 where production increased from 581 in 1968 to 952 in 1969. It was evident, therefore, that the decline in production of nightgarments of woven discontinuous synthetic fibres was merely illusory as the use of knitted fabrics by the Swedish industry had directed their production into another statistical position.
Mr. Henriksson, reverting to undergarments, sought clarification on the classification of undergarments cut and sewn from knitted fabrics. Mr. Ho confirmed that such garments would be classified as knitted undergarments.
5.
After thanking Baron de Geer for the additional table further analysing the position, Mr. Ho recalled that at the last session in Hong Kong he had outlined the difficulties in the situation as Hong Kong saw it. He wondered whether the Swedish side had had time to reflect further on the matter. Hong Kong's principal concern was the Swedish criteria for restricting imports from "low cost" suppliers only. He added that in a number of cases Hong Kong prices were in fact higher than those from Finland, Portugal and Denmark. Hong Kong's industrial advisers had also made the point that prices were related to the fabrics used and in a number of cases overall figures of imports obviously did not compare like with like. There would appear to be two separate markets being catered for by Swedish production and Western imports on the one hand, and imports from Hong Kong on the other.
6.
Mr. McEnery confirmed the existence of two markets for shirts, for example, in the U.K.: Hong Kong dominated the cheaper market whilst the U.K. produced shirts supplied the quality and fashion market.
7.
Baron de Geer merely reiterated his Government's decision to regulate imports of cheap priced shirts.
8.
Mr. Ho stated that he had two observations to make
(a) increased imports from Hong Kong, under the terms of G.A.T.T.,
the international instrument under which both Hong Kong and Sweden conducted their business, did not constitute serious injury to the Swedish industry; and
(b) the increase in value of imports from Hong Kong, despite the
current restraints, was due to trading up: faced with quantitative restrictions it was natural for Hong Kong to sell the same quantity at better prices.
He went on to say that no other country was faced with the same unique situation as Hong Kong, where exports were absolutely necessary for its survival. With regard to wage rates, South Korea's was 1/3rd of Hong Kong's, Taiwan's was and Macau's some 30% lower than that of Hong Kong. In the Far East, Hong Kong's wage rates were second only to those of Japan.
CONFIDENTIAL
19.
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