TNAG-0391-FCO40-437-Restriction-on-cotton-textile-exports-from-Hong-Kong-to-the--1973 — Page 55

Reference.........

MMG 51/6

Mr Hazle (TRED)

RESTRAINTS ON COTTON YARN

I refer to your minute of 23 November and would like to offer two points regarding the DTI submission.

2. Firstly, the proposal does not appear to allow for the adverse effects on production costs and competitiveness of the British textile and clothing industries of protecting a major input cotton yarn. The apparent paradox of our pressing the EEC towards a more liberal regime for textile imports, while the SEC requires us to liberalise cotton yarn imports, can be explained easily by this.

3. Secondly, there is the absence of adjustment assistance. It makes economic and social sense to assist labour and employers to shift from stagnant or declining sectors to expanding sectors with higher added value. If more effort is directed into retraining and to moving labour away from less secure low-wage employment into jobs with better pay and prospects, the local political dividends could also be higher and more lasting than the alternative road (or cul-de-sac) of industrial protection.

26 November 1973

Admarmir Дом

Adrian Smith

Economists Department

Copy to:

Mr Murray (SAD)

Mr Goodfellow (HKIOD) Mr Nixon (NENAD) Mr Hart (EID)