TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 87

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36.

In 1976, the value of Hong Kong's

exports of these 7 items to the EEC was HK$3,345 million. Had your proposed limits for 1978, been in force in 1976, this valus would have been reduced to HK$2,825 million. Thus in

terms of actual trade for these items in 1976, your proposals wouldhave involved a cutback of HK$520 million or 15.5%.

37

The proposed limits, if imposed in 1978, when compared with those limits which would have applied had the terms of the current EEC/HK agreement been extended unchanged into 1978;* would mean a loss in export potential amounting to HK$1,067 million. This would mean a cutback of more than 1 percentage points in the growth of Hong Kong's overall global domestic exports.

38.

As you know, Mr. Chairman, Hong Kong being a resourceless economy, is wholly dependent on the export of manufactures. Half of these exports is in textiles and clothing and one third of textiles and clothing exports goes to the EEC. From the percentages and figures which I have just given you relating to the 7 items and your proposed cutbacks in respect of them, it is clear that the EEC's proposals, if applied, will have serious repercussions for Hong Kong's e conomy

as a whole

39.

Mr. Chairman, at the time of your visit to Hong Kong in August, we made an estimate of the effects which your proposals waild In ve on employment and on Hong Kong's gross domestic product. It was estimated that the cutback in actual 1976 exports resulting from the restraint limits which you proposed at that time would render 10,000 people unemployed. In addition, the loss