Peference
5 5R+P 07**%31?
that the proposal for rigid global ceilings had very alarming implications for HK, since the colony would suffer every time a new supplier appeared on the market. Mr Parkinson agreed that the proposal had serious flaws, and added that the pressure might be reduced if the industry could be persuaded of the difference between access rights and actual trade: there was considerable evidence that a large number of quotas were substantially underfilled. Mr Nicholl observed that HK was likely to suffer on the enlargement of the EC. Mr Parkinson said that the UK industry was also nervous about the consequences of enlargement. Mr Nicholl said that a particular problem for HK was the Portuguese desire to include its remaining colonies - including Macao - as a
member.
Mr Tang asked about the UK industry's view of the flexibility provisions under the existing MFA, which could serve as a way of reducing import pressure when demand was weak. Mr Parkinson said that the industry was in fact very concerned: the very substantial swings which could result from carryover were seen as strengthening the case for tighter controls rather than a way of reducing import pressure. He emphasised the difficulty of making points of that nature in the UK given the industry's extremely effective lobby.
Mr Bailey estimated that adverse publicity about textiles was about twenty times as common as good publicity: individual "good news" stories - such as HK's action to prevent origin fraud, however, attracted considerable attention. Mr Parkinson said that the proposed "Fact Sheet" was intended to rectify this information imbalance. Mr Nicholl said that the IIK industry was proposing to publish a pamphlet putting HK's case. Mr Parkinson welcomed this, but emphasised the difficulty of putting the argument at a time when jobs were being lost in the UK industry. He accepted that not all the job losses were the result of competition from 1dcs, but the ldcs had nonetheless been identified as the scapegoats, and the cne group for whom effective action was possible. Mr Cheong asked whether foreign investment in the UK would help to deflect the criticism. Mr Parkinson thought it would; and he added that if his mission was successful in reducing the HK/UK textile trade imbalance it would disarm some of HK's critics.
3
Mr Bailey observed that much adverse publicity in the UK concentrated on confused and unfounded allegations of "unfairness"; and it was notable that those who benefitted from low-cost imports took little part in the public debate. Mr Dorward agreed that it was important to destroy the argument that cheap goods were necessarily unfairly competitive. Mr Parkinson said that he had used two arguments in resisting calls for stricter controls: first, that the consumer (of whom there were 56m) had rights as well as the workers in the industry (of whom there were 750,000); and secondly, that it was no unfair advantage, but rather an unfairness in the opposite direction, to be poor. Both arguments had been attacked as provocative. Mr Bailey commented that the main difficulty in trying to redress the information imbalance was that the subject was highly technical and easily misunderstood. But HK might consider two possible approaches: first, the use of the consumer lobby; and secondly, to cultivate the regional press, which had an important position as an opinion- former in the industry. Mr Parkinson added that he had been making a determined effort to inform textile correspondents about Government policy; he had found that informal gatherings were particularly well suited to this purpose, there were signs of a slightly more understanding tone in press reports.
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4 Mr Chan remarked that Mr Parkinson had mentioned the proposed "recession clause" which some regarded as an indispensable feature of MFA3, and asked what was HMG's view on the subject. Mr Parkinson said that if an acceptable formula could be devised and negotiated HMG would accept it; but there must be doubt whether such a formula could be devised. Mr Nicholl observed that a recession clause was likely to operate out of phase with a cyclical market. Mr Parkinson said that the Government had limited faith in forecasts, which would be an
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