TNAG-0301-FCO40-337-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 186

Governor's request for consultations should be accepted

and that Mr Bottomley should be asked to take the chair

tati

Draft telegram to Hong Kong is

This has the

at the consultations.

attached. Deit.

agreement of

DTI and Commodities

BACKGROUND

3. At the third session of consultations with Hong Kong

Government officials on 24 November 1970, the Governor

raised the question of the application of the new tariff

on imports of Commonwealth cotton textiles in the United

Kingdom. He proposed that the decision to impose the

tariff should be reconsidered and perhaps put off until

1973 when it should be known whether Britain was definitely

entering the EEC. The Governor was told that the United

Kingdom had not expected to enter into full consultations

on this matter at the meeting, but these could be held

later if so requested by Hong Kong

4. In his saving despatch no 237 of 24 February 1970

the Governor stated that an Advisory Committee had been

set up by the Hong Kong Textiles Advisory Board to assess

the likely effects of the imposition of the tariff on

Hong Kong's cotton textiles exports to Britain. This

Committee has now reported and, as the result of the

survey it carried out on manufacturers and exporters in

it found that- Hong Kong covering 416 companies, some 27,000 workers in 294 of these companies manufacture textiles. In

>

view of the reduction in profit margins occasioned by

imports from Hong Kong having to pay the import duty,

it is estimated by the Committee that, while the cotton

spinning sector could continue to export yarn to Britain

at a profit of about 21% on cost, the cotton weaving,

made-ups and woven garments sectors could only sell at

under cost and would therefore lose the trade with Britain

NOTHING TO BE WRITTEN IN THIS MARGIN

-for the Unbest Kingdom

"market..

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