TNAG-1155-FCO40-1435-Visits-by-Members-of-Parliament-(MPs)-to-Hong-Kong-1982 — Page 219

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27. In general terms Hong Kong also has excellent trading

links and access to markets on the West Coast of the USA.

With its low cost production and geographical location

Hong Kong could well enable a UK manufacturer to develop

markets there which would be unattainable from their UK

manufacturing base.

III. Hong Kong/EEC Textile Negotiations

28. The current HK/EEC Textiles Agreement which covers the

five years from 1978 is due to expire at the end of 1982.

This is a very restrictive agreement which in general limits

exports from Hong Kong to the 1976 import levels. Under

this agreement, Hong Kong's established access rights in

certain categories were substantially cutback. To quote

an example, the 1978 Community quota limit for Hong Kong

in respect of cotton woven fabrics was well below the limit

agreed for the UK alone in 1959.

29.

Negotiations with the Commission of the EEC for a new

agreement have started. Two rounds of negotiations were held in Brussels in June and September 1982 respectively.

30. When drawing up its textile mandate, the EEC classified

Hong Kong as a 'dominant supplier', along with Korea, Macau

and Taiwan. The EEC has indicated that its new agreement

with Hong Kong should comprise the following restrictive

elements:

(a)

(b)

cutbacks of about 12% on the 1982 restraint

limits for 5 'sensitive' categories of products (woven and knitted shirts, trousers, blouses and sweaters) which make up some 70%

of Hong Kong's apparel exports to the EEC;

minimal growth rates (ranging from 0.1% for

the 'sensitive' categories to 3% for some of the less sensitive categories);

(c) ....../-