TNAG-0304-FCO40-340-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 34

South China Morning lost

8/12/71 Desperate plea fails to halt U.K. textiles move

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Frantic efforts by the Hongkong Government and industry to stall the United Kingdom's move to impose both a tariff and quotas on the Colony's textile exports to the UK failed last night.

The United Kingdom is to go ahead with her decision to retain the existing system of quota restrictions on imports of cotton yarn and woven cotton textiles from Hongkong and other currently restricted countries, it was officially announced in Parliament last ¦ night.

The only achies entent H last minatr nks Hongkong had had with UK officials Was

agreement that the Colony would send a mission to London on January 10, So that could reiterate its specific proposals to reduce

the worst effects of the im- position of both the tariff and quotas.

During the weekend, a two- man delegation flew to Lon- don to plead for a reprieve for Hongkong's exports.

Hongkong's delegation, led by Mr C. P. Haddon-Cave, Financial Secretary. held discussions with Mr Anthony Royle, Parliamentary Under- Secretary of State at the

Foreign and Commonwealth Office, and Mr Anthony Grant. Parliamentary Under-Secretary of State for Trade, and with FCO and D officials about the British Government's decision to retain the existing system of quota restrictions on imports of cotton yarn and Woven Cotton textiles from Hongkong and other currently restricted countries.

"The flongkong officials visited London ai the invitation of HM Government. The British and Hongkong Governments have agreed to further talks beginning on January 10, 1972 in order to examine in more detail the implications of the decision for Hongkong's trade in colton 1 textiles with

United Kingdon," a jout statemen said.

t'omncating on the BearsÉT tinvernment's decision i retain the existing system et quota restrictions in import of cotton yarn and woven cotton textiles from Hongkong and other currently restricted countries which was announced in Parlament yesterday, a Government spokesman said:

"The Hongkong Government was informed only 10 days ago that the British Government was considering the continuation of quotas as well as the imposition of tariffs

on cotton woven textiles.

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"When the invitation from HMG was received the Governor decided that delegation should go in London Jo makc immediate representations on the effects on Hongkong trade of such a

move.

"The Textiles Advisory Board was consulted before the delegation left, and advised on the various implications for the

Hongkong textile industry.

"The

Financial Secretary and the Deputy Director of Commerce and Industry arrived in London on Sunday and talks started on Monday morning.

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"As a result of this visit, it bas been agreed that Hongkong delegation will continue the discussions in London in January.

Comment

"This will give a further opportunity for the Hongkong Government. to reiterate its specific proposals to the British Government, designed to reduce the worst effects of the imposition of the tariff and quotas,"

The Financial Editor writes: Another restrictionist tarifT wall thrown up in the face of Hongkong's beleaguered textile industry.

That, at

first glance, appeared to be the message from the British House of Commons, confirming the fears of local industrialists who had cabled the UK. mthorities pleading for a better deal,

But last night the men in the

Rundown

in Lancs

a major factor

Me D. '. Romdhwaite. Act ing Senior British Trade Commissioner, said the British Government had taken the decision with regret and only after the

Ost anxious consideration.

ile added: "The rapid randown of the Lancashire textile industry has been a major contributory factor. Between 1958 and 1969 the labour force feli from over 250,000 to under 125.000.

"Although under the rationalisation programme it was envisaged, and indeed intended. that further reductions in the labour force would take place, there was in fact a sharp escalation in the rate of increase of mill closures and unemployment in Lan cashire.

"Already this year 90 mills have posted closure notices involving over 15.000 workers and this is far in excess of the anticipated rate. Even modern. fully automated, factories working a three shift system are facing difficulties.

"In addition to these probicas the British Govcrament not only had to bear in mind the consequences of U.S. restrictions on imports of non-cotton textiles which have created the risk of a diversion of Asian gonds of the type produced in Lancashire but also of heavy shipments in the pipeline at a considerably higher level than usual.

"It is against this background that the British Government has reluctantly eome to the conclusion that the policy previously announced of reintroducing quotas

selectively only if and when imports of particular products cause disruption, is unlikely to give the necessary stability of market and employment conditions.

"The British Government iras taken close account of Hempkang's interest as a major supplier of cotton textiles to the British market. They continue to believe that efficient producers will be able to sell profitably (0 the United Kingdom.

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They also believe that it will still be possible for imports to satisfy up to 50 per cent of the domestic consumption cotton textiles. This is a far higher proportion than that of other major industrial country all of whom have long since applied a combination of quotas and tariff protection.

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"It is the belief of the British Government that the modified policy will safeguard the British market against disruption and will provide R reasonable measure of protection for Lancashire and will safeguard the position of the traditional suppliers such as Hongkong.

Colony who should know were counting the pros and coas, and they believe that our textile firms will be net gainers under the new proposals.

Ceriainly the represents a complete about face by London.

Our

move

negotiators and businessmen planning their production runs had been going ahead on the basis that the quota system would be 1 removed on January 1 and replaced by a tarit. Now we have both.

And the change of mind was only intimated to some high Government officials ten days

ago.

But

the panic

melts somewhat under close examination. First and foreinst it was being pointed out that in an entirely quota- free U.K. import market Hongkong would have been exposed to the full blast of competition from cager low- cost producer including Taiwan at South KOFER.

countries

We still sve por mounding to 200 million square yards of woven cotton textiles and another 50 to 60) million yards of kuitted fabrics,

And Hongkong has retained its privileged Communwealth status in the British market -- at least until the final crucial talks

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