0003230
G.F. 323
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- 10.
underwent further finishing processes in Sweden, such as labelling or packaging, before being re-exported to other countries, mainly to the United Kingdom. In conclusion, he mentioned that 80% of imports from Portugal came from Swedish factories established there.
Woven cotton slacks. jeans and trousers (excluding shorts) ex 841.117 and ex 841.146)
46.
Mr. Bernunger observed that Swedish production in 1969 was able to increase as a result of expansion in the manufacture of trousers made of corduroy fabrics. He argued, however, that there were still problems caused by imports which continued to rise in 1969. Hong Kong was a large supplier although imports from this source declined slightly during that period. He stated that the Swedish industry was anxious to ensure that these imports would not jeopardize expansion opportunities in respect of corduroy trousers.
47.
Mr. Ho pointed out that Swedish exports had increased by 100% in 1969 over 1968. He remarked that as Swedish production had expanded and imports from all countries except Hong Kong had increased markedly in 1969, he could see no evidence of market disruption caused by imports from Hong Kong. Furthermore, Hong Kong's share of total imports continued to decline from 55% in 1967, to 34% in 1968, and to only 26% in 1969. Mr. Tien commented that the bulk of Hong Kong's exports of cotton slacks consisted of blue-denim jeans.
48.
Baron de Geer argued that the Swedish industry had not yet fully recovered from the decline in production caused by imports in 1968, and his Government was still concerned about the flooding of the Swedish market by cheap denim jeans from Hong Kong. Answering Mr. Ho, he stated that only imports from Hong Kong and Portugal were currently under restraint. Moreover, Sweden would never restrain imports from the U.S.A. or Belgium because wages there were comparable with Sweden's. Indeed, this kind of competition was welcomed in Sweden, but "social dumping" from low-wage countries such as Hong Kong, was not.
49.
Mr. Ho commented that these arguments were not tenable. The manufacturing sectors in Hong Kong and Sweden were not comparable as they were in completely different strata: the former being more labour-intensive and the latter more capital-intensive.
Therefore, wages and prices could not be taken as the sole indicators of market disruption. Sweden was a high-priced producer and Hong Kong's relatively cheaper goods simply met the demand of a different sector of the Swedish market.
50.
Mr, Tien pointed out that wages for Hong Kong workers were among the highest in Asia. Moreover, he understood that some U.S. firms, by establishing subsidiaries in Belgium and Portugal, were able to export jeans and trousers to Sweden at prices lower than Hong Kong's.
51.
Mr. Dorward argued that competition could only be gauged by reference to actual domestic consumption. Unit prices were quite irrelevant. Since imports of trousers from U.S.A., the biggest supplier, had been increasing and Swedish consumption expanding while Hong Kong exports declined, it was utterly illogical to attribute any damage to Swedish producers to Hong Kong competition; and deny the effect of U.S. penetration just because the U.S. had wage rates comparable to Sweden.
52.
Baron de Geer said that Swedish policy regarding production in key industries required the maintenance of a level below which domestic production could not be allowed to fall, thus ensuring minimum capacity to supply domestic needs in the event of economic isolation due to war in Europe. Moreover, the aim of his Government was to
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