TNAG-0939-FCO40-1158-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1981 — Page 26

Reference........................

Fabric

Mr Parkinson asked whether it was right to assume that the commodity fabric sector was closed to British exporters. A number of the measures already mentioned might enable British exporters to break into this market; and with the advent of origin marking, and the current "Buy British" mood in the UK, there could be increased incentives for HK garment manufacturers to use British fabric. Mr Corrigan suggested that there were also possibilities of using British cloth in garments to be sold to the USA. Mr Nightingale remarked that this may be true for quality fabrics but not for commodity fabrics. Mr Parkinson pointed out that Japan was currently a large supplier of medium-quality commodity fabrics; and their share of the market might be difficult to sustain once the yen strengthened again. Mr Sousa confirmed that other SE Asian countries could not supply the more sophisticated commodity fabrics, and this could provide an opportunity for UK exporters. Mr March added that in addition to the quality sector and the Japanese share of the commodity sector UK exporters might look to that part of the commodity market currently supplied by other West European manufacturers. Mr Nightingale noted that German and Swiss manufacturers seemed able to sell commodity fabrics to HK, although they shared with the UK the disadvantage of a strong currency. He wondered whether this was because German and Swiss retailers had specified the use of German and Swiss fabrics. Mr Sousa said that, while he accepted that eg German retailers were more chauvinistic than their UK counterparts, he thought the main reason for German and Swiss success was their greater aggressive- ness in the HK market. After closing courtesies the meeting ended.

CODE 18-77

SS 8.78

3