TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 241

CONFIDENTIAL

6. AS YOU KNOW, HONG KONG IS NO LONGER VERY COMPETITIVE IN MANY

CATEGORIES OF TEXTILE EXPORTS. THE NUMBERS OF CATECORIES IN WH.

DURING 1976 WE EXPORTED TO THE EEC LESS THAN 95% OF OUR QUOTAS

WERE AS FOLLOWS:

UK

17 OUT OF 21 CATEGORIES

ITALY

11 OUT OF 15

''

BENELUX

19 OUT OF 15

DENMARK

9 OUT OF 14

''

GERMANY

7 OUT OF 14

IRELAND

6 OUT OF 12

FRANCE

5 OUT OF 15

ADMITTEDLY, IN SOME OF THESE CATEGORIES WE EXPORTED A FAIR PROPORTION

OF THE PERMITTED QUANTITIES BUT IN 26 CASES WE EXPORTED LESS THAN

58%,

7. THE LIKELIHOOD IS, OF COURSE, THAT ANY REDUCTION IN GROWTH OR ANY ACTUAL CUTBACK WOULD BE SOUGHT IN THOSE CATEGORIES THAT WE STILL

CAN AND DO EXPORT IN CONSIDERABLE QUANTITIES. THAT IS TO SAY, THAT

THE REDUCTIONS WOULD NATURALLY BE APPLIED WHERE THEY WOULD DO MOST

DAMAGE.

9. THERE IS A FURTHER POINT THAT CONCERNS ME. IF THE EEC OBTAINED MODIFICATIONS TO THE MEA THAT WOULD ENABLE THEM TO DO THIS, THE GOVERNMENTS OF THE OTHER COUNTRIES WITH WHICH WE HAVE AGREEMENTS WOULD COME UNDER PRESSURE FROM THEIR INDUSTRIES TO DO THE SAME. I AM

THINKING PARTICULARLY OF THE UNITED STATES.

9. THE CONSEQUENCES OF SUCH DEVELOPMENTS WOULD BE SERIOUS,

THE GROWTH RATE OF THIS ECONOMY IS STILL HEAVILY DEPENDENT ON THE EXPORT OF MANUFACTURES, DESPITE THE CONSEQUENCE IN RECENT YEARS OF THE FINANCIAL AND BUSINESS SERVICES SECTOR. WITHIN THE MANUFACTURING SECTOR TEXTILE EXPORTS REPRESENT 50% OF TOTAL EXPORTS AND GENERATE 567 OF HANUFACTURING DIPLOYMENT. THIS IS BECAUSE THE TEXTILE INDUSTRY HAD DIVERSITED INTO CLOTHING AND FASHION GARMENTS.