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G.F. 323
CONFIDENTIAL
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62.
Baron de Geer then suggested that it might be best for the Swedish Government to impose import restrictions on synthetic shirts whilst the rest of the garments under discussion could still be covered by an agreement. Mr. Ho said that he only had instructions to discuss an agreement.
63.
Mr. Ho stated that the line between cotton and non-cotton shirts was extremely narrow. Garments made from blended fabric containing 51% cotton and 49% synthetic fibres by weight were deemed to be of cotton for the purposes of the C.T.A. A reversal of the percentages would make the garment non-cotton. The important
feature in marketing shirts nowadays was permanent press, and he had been informed by his industrial advisers that major weight cotton and minor weight synthetic shirts could also be given permanent press treatment and was not distinguishable from synthetic discontinuous shirts.
**
64.
Baron de Geer pointed out to the large cotton levels which were not being utilised and said that their industry was satisfied that the market for cotton shirts was dying. Mr. Ho said it was possible that Hong Kong was not selling woven cotton shirts because the quota was held by the smaller manufacturers without permanent press facilities. Once the restraint was lifted the previous frozen pattern of trade would be eased. He also reminded Baron de Geer of the upsurge in cotton anoraks trade and stated that there might be a similar trend in cotton woven shirts if they are made subject only to Export Authorisation. Whilst Hong Kong gladly accepted liberalisation of cotton shirts he would want the Swedish delegation to be left in no doubt of the possibility of history repeating itself.
65.
Baron de Geer reiterated the Swedish industry's belief that the cotton trade was dying.
66.
Mr. Ho asked Baron de Geer to reconsider this matter in the light of possible international implications.
The Swedes were claiming injury when production was up and exports have doubled. Mr. Ho added that their difficulties appear to be based on different interpretations on the provisions of G.A.T.T. with regard to injury or threat to injury.
67.
After a further exchange on the absence of injury when synthetic shirts and blouses were considered in isolation, and a further Swedish suggestion of import restrictions Baron de Geer proposed that another solution might be to combine the restraints for synthetic shirts, blouses and nightgarments at a level of 2,000
Shirts
660
Blouses
923
Nightgarments
339
1,922
rounded up to
2,000
68.
Mr. Ho stressed that the levels for synthetic shirts were unacceptable having regard to the absence of injury. Hong Kong had conceded last year on threat of injury but as it turned out no injury developed even with imports from Hong Kong at 1,159. There was also the question of the need for compensation for including sport shirts of discontinuous synthetic fibres in any restraint.
/69.
CONFIDENTIAL
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