TNAG-1155-FCO40-1435-Visits-by-Members-of-Parliament-(MPs)-to-Hong-Kong-1982 — Page 154

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cut-backs on Group I clothing categories, and to the anti-surge mechanism.

is also seeking special arrangements for children's clothing. Hong Kong has

argued that the EC-Hong Kong bilateral letters exchanged in the margins of the GATT Textile Committee in December last year (without which the Community would have blocked the conclusion of the Protocol of Extension) commits Hong Kong to

accept cut-backs, and that the economic case for these put forward by the

Community is unconvincing. In fact the exchange of letters contains a fairly

explicit commitment to accept cut-backs if the Community puts forward a respectable

economic case which it has done.

-

9 Hong Kong remains very much.the UK's most dominant low-cost supplier, accounting for almost 60% of the UK's clothing imports from MFA suppliers in 1980. (See tables at Annex A). Although Hong Kong's share of UK imports has

fallen slightly in recent years, the absolute level has not - in terms of value,

her exports to the UK increased on average by 13% per year, and there was also

an upward trend in volume terms.

10

Throughout the MFA renewal negotiations, the Government has had to have

regard to its special responsibility for Hong Kong. During the Community's

discussions to formulate the Commission's negotiating mandate, the UK

repeatedly made the point that Hong Kong's open market policy and the meticulously

fair way in which she administers her textile agreements, should count in her

favour.

UK Ministers achieved some limited success in softening the position

which some other Member States wanted the Commission to adopt in negotiating with

Hong Kong, but it became clear that for there to be agreement on a common EC

negotiating position, it would have to include provision for cut-backs averaging

10% on Hong Kong base levels for the five most sensitive clothing categories,

together with very low rates of growth. These elements are now considered

essential by the Community as a whole, including the UK. Without them the target

of limiting growth in imports in line with the growth in consumption could not be

met.

ASEAN suppliers

11 Negotiations with Thailand were concluded in early July, and a new agreement

within the terms of the Commission's mandate was initialled on 7 July. However