TNAG-0345-FCO40-381-UK-and-Hong-Kong-talks-on-cotton-textiles-1972 — Page 51

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4. YOUR PARAGRAPH 4. IN OUR VIEW THE PRINCIPLE OF CROSS-SWING ALREADY

EXISTS IN GROUPS 11 AND HII BY VIRTUE OF THE FACT THAT THE TOTAL

OF ALL CATEGORY CEILINGS EXCEEDS THE GROUP CEILING IN EACH CASE.

THIS ENABLES HONGKONG EXPORTERS TO CHOOSE WHICH CATEGORIES SHOULD

BE FULLY USED AND WHICH UNDER-USED. ANY FURTHER GENERAL PROVISION

FOR 10% SWING WITHIN THESE GROUPS WOULD EXPOSE THE MOST SENSITIVE

CATEGORIES WITHIN THESE CROUPS TO SIGNIFICANT INCREASES IN

ENTITLEMENT. WE REGRET THAT WE CANNOT THEREFORE AGREE TO SUCH A

GENERAL SWING FACILITY AND ANY PROPOSALS FOR MODIFICATIONS IN THESE

GROUPS WOULD HAVE TO PRESERVE THE PRESENT POSITION IN THE MOST

SENSITIVE CATEGORIES.

5. WE ESTIMATE THAT, EVEN TAKING ACCOUNT OF OUR PROPOSAL THAT

THERE SHOULD BE AGREEMENT ON FACTORS FOR SOME SCALING DOWN OF THE

ENTITLEMENT TRANSFERRED FROM GROUP 111 INTO GROUP IV (WHICH IS

NECESSARY TO US IF THIS AGREEMENT IS TO BE DEFENDED IN BROAD TERMS BOTH IN LANCASHIRE AND OVERSEAS), THE OVERALL EFFECT OF AN AGREEMENT

WITHIN THESE PRINCIPLES WOULD STILL RESULT IN ENTITLEMENT FROM

RELATIVELY CHEAP CATEGORIES OF FINISHED CLOTH BEING TRANSFERRED INTO

THE MOST EXPENSIVE CATEGORIES OF MADE-UPS.

DOUGLAS-HOME

INTERNATIONAL TRADE DISTRIBUTION

COMMODITES D

HKD

COPIES TO MISS L LOWNE N BILLINGHAM MISS J ELLIOTT K PRICE

DTI

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