TNAG-0345-FCO40-381-UK-and-Hong-Kong-talks-on-cotton-textiles-1972 — Page 141

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THE TIMES

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Cutting dated

11 JAN 1972

19

Hongkong reopens case 18 against UK textile quotas

By Guy Hawtin

Talks have begun between Hongkong government officials and textile industry leaders and the Department of Trade and Industry on Britain's decision to

retain quotas on cotton textile imports from the colony. The talks are expected to last at least three days and last night the DTI would not comment on progress.

The quota system was to be re- placed by tariffs this year but late last year, the Government decided to retain quotes because of worsen- ing employment. Now Hongkong textiles face both quotas and tariffs that range from 6 per cent for cotton yarns to 17 per cent on most woven cofton garments.

Informed sources Say the colony's position has changed little since earlier talks broke down in December. Britain's sudden change of policy, they claim, will seriously disrupt the colony's textile industry. Many concerns, geared to sup- ply an enlarged British market. could find themselves in difficul- ties. A large number of orders

have been accepted from Britain on the basis of a tariffs-only sys- tem and production has been planned on this basis.

The situation for Hongkong be- comes even more earnest in the light of last week's agreement to limit exports of man-made fibres and woollen textiles to America for five years. The colony has agreed to limit the growth of man-made fibre garment exports to 7.1 per cent annually and woollen garment exports to only 1 per cent. In 1970 Hongkong's man-made fibre ex- ports to the United States rose by 30 per cent.

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When the retention of quotas was first mooted, a collective state- ment by the colony's six main textile organizations demanded a retaliatory withdrawal of the new Comomnwealth preference tariff) if Britain enforced the measure.

Hongkong is a major importer of British products, including tex- tiles. The statement also claimed that retention of quotas encouraged developing countries to become in- creasingly protectionist.