TNAG-0304-FCO40-340-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 36

South Ching Horning Post

10/12/71.

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U.K. 'blow' will

not lead to unemployment

The double blow of quotas and tariffs which our textile trade now faces in Britain coming on the heels of the American restric- tionary measures is unlikely to lead to unemployment in the

industry.

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This was the view given last night by the Financial Secretary, Mr Philip Haddon-Cave, on his return from a whirlwind trip

to London.

"My mission was to hold talks about talks and Her Majesty's Government readily agreed to further discussions in the week beginning January 10," he said.

Asked about the likely effects of the surprise United Kingdom steps to retain quotas and slap on a cotton goods surcharge, the Financial Secretary said: "I doubt whether it will be disastrous but it could be quite awkward for those who have been writing orders in recent months."

Hongkong's textile firms had been going ahead on the basis that all quotas would be scrapped from January 1. The British Government suddenly changed its mind less than two weeks ago.

Mr Haddon-Cave made it clear that the tariff must affect profitability in certain areas where manufacturers will not now have the manoeuvrability to switch from fabrics to ready- made garments.

Mr Haddon-Cave did not conjure up the spectre of unemployment. He pointed out that industries like knitted textiles are unaffected by the UK decision.

And, in any event, they are capital intensive trades where the squeeze will mean lower profits rather than sackings,

In stark contrast to the Department of Commerce and Industry Director, Mr Jack Cater, who came back to Hongkong a couple of months ngo fuming about the “pistol at heads" tactics of the

our

Americans, Mr Haddon-Cave was not in a bitter mood.

He told a Kai Tak press conference the London negotiations were very friendly and civilised although there was some sharp talking at times.

But he said: "I do not personally believe that restraints on trade are good for either buyers or sellers."

On a more general theme, the Financial Secretary said Hongkong was passing through an uncertain time against a background of the United States and other markets retreating in trade policy for monetary reasons.

Tremendous

He said he did not think the Colony could sustain the tremendous economic surge seen since 1967, but "I have no doubt that we shall maintain a satisfactory growth rate in the next few years."

The Chairman of the Trade Development Council, Mr Y. K. Kan, said yesterday the UK Government's decision was "a retrogressive step."

Mr Kan said: "It will create confusion among buyers and sellers by cutting across contracts made on the explicit understanding that the quota system would be removed on Jummary 1."

.

However, Mr Kan noted that the restrictions were limited to imports of cotton yarn and woven cotton textiles, and did not include other fibres.

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