(c)
(a)
-
11.
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in some cases, the elimination of, and, in others,
very small percentages for, flexibility;
the EEC wants unilateral rights:
i)
ii)
iii)
to debit Hong Kong's quotas with
those shipments which the EEC
considers to be fraudulent;
to apply a mechanism designed to
prevent surges in exports where an already established restraint
limit has been heavily under-
utilised in previous years (which
means a cut-back in a different
form);
to bring new categories of products
under restraint.
31.
The dilemma, which Hong Kong faces is how to arrive at
a reasonable settlement with the EEC in the face of such
strident and unreasonable demands, in particular, the demand
for a 12% cut-back of the existing quotas for the five
garment categories concerned. It has been estimated that
a 12% cut-back in these categories would be equivalent to
£53 million or roughly 6% of Hong Kong's total textile and
clothing exports to the EEC in 1981. The continuing effects
such a cut would have on the local economy over the life of
a multi-year agreement would be severe and would be compounded
by an inevitable ripple effect. To agree to the terms
presently being demanded would not only do substantial damage
to Hong Kong's legitimate trade with the EEC, but would
provoke the USA into re-opening the recently concluded
Hong Kong/USA bilateral textile agreement. Both Canada and
Sweden have also indicated that they would demand terms
similar to those which Hong Kong conceded to the EEC.
Moreover, such a course of action would set a pattern for
others to follow for years to come. On the other hand, failure to reach an agreement with Hong Kong's second
largest export market would create a lot of uncertainty
for Hong Kong's single most important export sector and
could....../-
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