TNAG-0464-FCO40-529-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 156

FOOTWEAR

16. THE HONG KONG FOOTWEAR INDUSTRY IS NOW

UNFORTUNATELY IN A PATHETICALLY DISTRESSED CONDITION. IT

IS CONCENTRATED IN TWO SMALL LINES OF PRODUCTION AND THUS

VERY SENSITIVE TO MARKET INFLUENCES.

IT IS ALMOST A

COTTAGE-TYPE INDUSTRY. MORE THAN HALF THE SMALL FACTORIES

EMPLOY LESS THAN 10 WORKERS EACH.

AS A RESULT OF THE DROP

IN PRODUCTION SINCE 1971, AT LEAST PARTLY FOLLOWING THE

DISCRIMINATION IN THE EEC GSP, MANY HUNDREDS OF WORKERS

HAVE LOST THEIR JOBS.

COMPARED WITH 255 FIRMS, IN EARLY 1973

ONLY 155 ARE NOW STILL MAKING FOOTWEAR. AT THE END OF 1971

THE FOOTWEAR LABOUR FORCE WAS NEAR 13,000; BY FEBRUARY 1974

IT WAS LITTLE MORE THAN HALF THAT FIGURE.

17: THERE NEVER REALLY WAS ANY JUSTIFICATION FOR

DISCRIMINATION AGAINST HONG KONG IN THE ORIGINAL BEC SCHEME

IN 1971. WE NEVER CAUSED ANY MARKET DISRUPTION IN THE EEĊ.

FOOTWEAR NEVER REPRESENTED MORE THAN 5/6% OF OUR EXPORTS TO

THE EEC. NOW THE FIGURE IS LESS THAN 3% WHILE OUR COMPETITORS

THRIVE.

OUR WEAK INDUSTRY HAS SIMPLY JUST NOT BEEN ABLE TO

COPE WITH THIS WORSENING SITUATION.

OUR FOOTWEAR EXPORTS

TO THE SIX IN 1973 WERE DOWN TO HALF THEIR 1971 LEVEL EVEN

IN VALUE TERMS (WHICH DISTORT BECAUSE OF PARITY CHANGES,

RISING COSTS, ETC). EVEN IN THE UK, WHICH IS OUR BIGGEST

/FOOTWEAR MARKET,

9.