TNAG-0250-FCO40-286-Discussions-on-EEC-negotiations-between-officials-of-Hong-Ko-1970 — Page 194

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NON-COTTON TEXTILES (MAN-MADE FIBRES AND WOOL)

inconserbet with the reites of the titty

Apart from the non-two restrictions which France

maintains on Hong Kong's non-cotton textiles, both the UK and

Ewly

the EEC has tariff protection one against man-made fibre

s/tariff

goods from Hong Kong. On wool goods, Hong Kong faces a

tariff in the EEC, but enjoys duty-free entry into the UK.

7

All major developed countries other than the United States

restrict imports of some non-cotton textiles from Japan. As

explained in brief No

the United States has for some time

*

been seeking to restrict imports of non-cotton goods from

Japan, Hong Kong, Korea and Taiwan either by means of

voluntary restraint arrangements, or by quotas imposed under the

Trade Bill now before Congress. The UK and EEC on the other

hand are working towards the liberalisation of Japanese non-

cotton textiles, subject to reciprocal concessions on the

part of the Japanese.

The Japanese have so far failed to reach an accommodation with

the USA, largely because the terms offered by the Americans

have been unacceptable to the Japanese industry. A further

round of talks is, however, now taking place, which may end in

agreement. Hong Kong's attitude is that she would prefer to

negotiate a voluntary agreement rather than have quotas imposed

on her under the Trade Bill. We have however taken the line

that she must not make overtures to the Americans until we see

whether the Japanese have held firm or yielded to US pressure.

Quite apart from the damage to liberal trading policies which

would result from the implementation of the Trade Bill and/or

the existence of a network of voluntary restraint arrangements

for non-cottons, there is a risk that if the USA restrict access

to its market and particularly if this involves a cut back

in the present level of trade Asiatic

vid

substantial quantities of Asian

Adriatic non-cotton textiles would be diverted to Europe an

markets. The UK has therefore joined with the Six in suggesting