2.
+ B
difficult to see any logical connection between the two), those
countries with GNP far higher than Hong Kong's, which include
every member state except Ireland, should voluntarily reduce
their textile exports to a much greater extent.
Visible trade balance
5.
Bilateral visible trade balances are only one constituent
of the overall balance of payments which is the thing that matters.
6.
A so-called unfavourable bilateral balance of trade is
a natural product of the fact that the world's trading countries
are all at different stages of development and possess different
resources, in raw materials, labour, skills, manufacturing
capacity, etc.
7.
If left alone these bilateral differences should
contribute to an overall balance of advantage.
8:
If there is no such overall balance, the intervention
can be justified only by reference to the condition of the
overall balance of payments, which must take into account capital
movements and invisible trade as well as the visible trade.
9.
It follows thatthe fact that 'favourable' or
'unfavourable' balances of visible trade exist with any particular
trading partner is not in itself grounds for official intervention
to alter the situation. Does the Community intend to impose
restrictions on trade in order to reduce its visible trade
deficit with the USA? What is the Community's attitude to
China's wish to see a clear arithmetical balance of bilateral
trade between China and the Communi ty?
10.
Hong Kong, having no natural resources, depends on
exports to pay for its imports but it always has an 'unfavourable '
balance of visible trade. The gap is filled by invisible earnings.
11.
Any action to reduce Hong Kong's export earnings will
nevertheless reduce its capacity to import also. And the decline
in purchasing power will affect imports generally, not only
those purchased by the textiles and clothing industry.
/12.
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