TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 110

for sure ourselves. But those statistics, which the importing country

confirmed were accurate when we queried them, did show that in one year

the importing country exported a bit more than it produced and imported

about as much as it exported. So when you calculated the level of

consumption, or the size of the market if you prefer to call it that,

by adding imports to production and then deducting exports, you arrived

at a consumption figure which was lower than the import level. Hence

the over 100% import penetration. The increase in production had

nothing to do with the degree of import penetration but was made

possible by an increase in exports.

This is perhaps an extreme case. But it is true and it

demolishes the whole "import penetration" argument. Those who are

putting forward this argument would, if they could get it accepted, ́

be able to preserve their home market and at the same time export as

much as they like. Because, if this idea was accepted then, if the

domestic market for a product was shrinking but the domestic industry

was exporting increased quantities, the import penetration percentage

could be rising, while domestic production sales and profits were

increasing too. But we should all be obliged to restrain our exports

even though the domestic industry was flourishing, because the import

penetration ratio was rising.

At the Textiles Committee meeting held last December the

Hong Kong delegation called for a re-affirmation by all participating

countries of their adherence to the objectives of the MFA in order to

ensure that its application and operation accorded fully with the true spirit and precise letter of the text. Many developed countries supported this - including some of those proposing to make the MFA more restrictive. One cannot help but feel that they were merely paying lip-

service to the objects of the NFA. For how can the FA achieve its

objectives of "expansion and diversification" of the developing countries' export earnings, and "expansion of trade", "reduction of barriers to such trade" and "progressive liberalisation of world trade in textiles products", if its provisions are to be changed in such a way as to further restrict the developing countries' access, and the growth of such access, to the markets of the developed world from which they earn the bulk of their export earnings? These proposals just cannot be reconciled with the objectives of the NFA as stated in the

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/Preamble