TNAG-0391-FCO40-437-Restriction-on-cotton-textile-exports-from-Hong-Kong-to-the--1973 — Page 83

seems likely that Hong Kong would not necessarily benefit from liberalisation. In fact it could be that she would lose out to other suppliers if she lost the safety of her export quota to Britain.

5. With imports from the Mediterranean Associates already liberalised, it is also worth bearing in mind that if we do not liberalise imports from Commonwealth suppliers, we shall be

discriminating against

them in favour of particularly Turkey and Spain.

especially the first production industry.

stage

6. I find it surprising that after more than a decade of trying to get the British cotton industry to rationalise, and the expenditure of many millions of pounds of government money to this end, that we should still be talking in terms of protecting inefficient

Industry was warned some four years ago that this was to happen and they have had plenty of warning. The policy now being proposed by CT Division seems further more against the policy on textiles which we have been pursuing so far with our partners in the Community, ie to press them for greater liberalisation and harmonisation. The present proposals seem to me to be a retrograde step.

7.

CRE Divisions of DTI have not so far made up their minds what to do about this paper but it seems quite possible perhaps likely - that they will oppose it. I think we should too. The problem of imports is her an emotional issue in Britain. Spinning is concentrated in certain towns which are in some cases marginal seats. I should not be surprised therefore if in the end CT Division get their way I should also welcome comments from SAD and HKIOD. In particular I should welcome confirmation of any export subsidies practiced by Pakistan and India over the export of cotton yarn.

8. EID(E) are considering the aspects of this paper in relation to our membership of the EEC.

24 October 1973

CC

Mr Murray SAD

Mr Goodfellow HKIOD

Mr Hart EID(E)

PS

K W Hazle

Trade Relations and Exports Department

You may wish

w that the present cotton yarn quotas

are as follows-Hong Kong 6.6m lbs, India 13.1m lbs, Pakistan 300,000lbs, Egypt 386,000lbs and Jamaica 200,000lbs. Almost all other low cost imports are from Mediterranean Associates.