TNAG-0335-FCO40-371-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 31

TEXTILES

CONFIDENTIAL

SECRETARY OF STATE'S VISIT TO HONG KONG

2-3 NOVEMBER 1972

GENERAL DEFENSIVE BRIEF

BRIEF NO 2

Polyester Cotton Textiles

1.

In early October Hong Kong reluctantly agreed to a voluntary restraint arrangement limiting the Colony's export of polyester cotton textiles to the United Kingdom. The agreement will run to the end of 1976 (subject to review) and will provide the Hong Kong industry with some growth prospects whilst at the same time giving the United Kingdom industry the breathing space it requires.

Restraint became necessary owing to the rapidly increasing penetration of the British market from Far Eastern sources, which was having a serious effect on employment opportunities and on our industry's ability to achieve viable levels of production. In 1971 developing countries supplied 47 per cent of our imports of polyester/cotton fabrics (Hong Kong alone supplied 42 per cent) and 85 per cent of our imports of polyester/cotton garments (nearly all these came from Hong Kong). Hitherto Britain was the only major developed country with no import restrictions of any kind on non-cotton textiles (except from Japan).

Arrangements to restrain such imports from the Republic of Korea and from Taiwan also are in train.

Cotton Textiles

2.

Imports of cotton textiles have been restrained for many years. Hong Kong's quota amounts to about 45 per cent of our total cotton textile quotas.

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CONFIDENTIAL