TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 112

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· 12.

Even if one were to accept that there was any

validity in an argument linking cutbacks in textiles to trade

balances, there would be no logic in applying this argument to

Hong Kong and the other 'principal suppliers' unless it was

also applied to, for instance, the United States, Japan and

Iran, each of which runs trade surplus with the EEC much larger

than Hong Kong's, and to Malaysia, which runs a surplus larger

than Korea's and Taiwan's though some what smaller than

Hong Kong's.

$

Predicament with regard to a new KFA

13.

The first point to make here is that there is not

going to be a new MFA. There is going to be a renewal of the

existing MFA or no MFA at all. It is difficult for Hong Kong

to see that countries which have a higher GNP per head than Hong Kong or which are less dependent on textile exports is in any greater predicament than Hong Kong.

14.

Hong Kong has built up and maintained its exports

of textile products despite a steadily widening range of

restrictions on those exports while many other countries have

had no restrictions on their exports to the EEC. They have

heen able to compete more freely than Hong long and in some

sectors they have done so very successfully.

15.

The fact that Hong Kong has been able to maintain

its position as a principal supplier is due to its ability to

supply what the market requires in those sectors where we are

still competitive.

16.

Why should Hong Kong be penalised for its success?

Hong Kong believes that this question should be considered in

the light of these considerations:

(a) Hong Kong is a practically resourceless territory;

(b) Hong Kong is almost uniquely dependent on exports

of manufactures;

/(c).