TNAG-0301-FCO40-337-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 152

Any doubts about Hong Kong's prosperity inevitably undermined its political stability and if the European countries appeared to be transferring their trade to Taiwan and South Korea the viability of Hong Kong in the eyes of its neighbours would be destroyed. It was the conjunction of so many uncertainties in the textiles field that led them to seek modification of the U.K. tariff decision,

10. The D.T.I. accepted the importance of maintaining confidence in the colony's future and recognised the undesirability of discrimination against Hong Kong

In the event of enlargement of the within the UNCTAD Generalised Preferences.

There

E.E.C., however, there might be opportunities for modifying its offer. were already pressures among the Six to exclude textiles from the present offer and the U.K. would fight hard to ensure that an enlarged Community did not

As far as the introduction of the U.K. tariff discriminate against Hong Kong.

The D.T.I. was concerned, however, the main question was whether the Hong Kong cotton textile industry would remain competitive on the U.K. market and profitable. believed that, given some alteration in the pattern of Hong Kong exports involving a concentration on some new sectors, Hong Kong would be competitive, and it had had sufficient warning to make the necessary changes.

11.

It was agreed that the U.K. Government would send a reply to the Governor's Saving Despatch of 8th January 1971 covering the points raised in it and matters

This reply would attempt to deal again with the discussed during the meeting. question of the circumstances in which quotas might be reimposed, but it would not be possible to lay down in advance what the reaction would be to every hypothetical situation. At the request of Hong Kong, the D.T.I. agreed to investigate the possibility of requiring certificates of origin for goods imported after the removal of quota restrictions.

12. Hong Kong raised the question of the treatment of cotton textiles shipped to the U.K. under quota in 1971 but not arriving until after the introduction of

They regarded it as inequitable that these goods the tariff on 1st January 1972. should subject to duty and thought that if they were this would cause dispropor-

If they were placed in the position of tionate ill feeling among traders.

be

having to ship the full 1971 quota to the U.K. in the first ten months of the year in order to avoid duty this would interfere with normal trade flows and The repercussions on trade oblige them to divert goods from other markets.

Hong Kong oammitments following from this could place them in difficulties. therefore asked that all goods shipped under quota in 1971 should be exempt from the tariff. There would be no problem of identification and such a concession would make it much easier for Hong Kong to accept the tariff decision as a whole. The D.T.I. thought that such a course might be difficult in the absence of specific legislative authority and appear inequitable to other suppliers and a breach of the undertaking to the U.K. industry contained in the President's statement. There had been ample warning of the change to allow suppliers to adapt to it. Nevertheless the D.T.I. agreed to examine the position further

to see if there was any way round the difficulty.

13. During the discussion on the prospects for trade in non-cotton textiles, Mr. Jones stressed the dangers that would arise if a new Trade Bill was brought forward in the U.S. congress which sought to impose protection not only in the

In the long term it fields of textiles but in other areas of trade as well. would not be possible to avoid restrictions on trade in non-cotton textiles and the treatment of cottons and non-cottons would have to be brought into line.

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