ENG-1961 — Page 105

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INDUSTRY AND TRADE

contracting parties of GATT and the International Labour Office, which was studying problems of market disruption.

During the same period, the increased exports of Hong Kong textiles and garments to the North American market in 1960 led to growing demands from industries both in Canada and the United States for restriction. At the beginning of March, a party of Canadian officials came to discuss this question, and, following similar exchanges with the United States Government, the Financial Secretary and the Director of Commerce and Industry visited London in May for talks with officials of both Canada and the United States. While these discussions had their origin in problems associated with Hong Kong's textile exports to North America, (although these had in fact fallen by nearly one-third in the first quarter of the year), they also covered the more general subject of international trade in cotton textiles.

On the initiative of the United States, an international con- ference of the principal nations concerned in the cotton textile trade was called under the auspices of the GATT Secretariat at Geneva in July. This resulted in a draft interim one-year agreement in which the principle of expansion of trade was accepted, but which was more immediately concerned with safeguarding the short-term interests of domestic industries in importing countries in the event of a threat of their disruption by low cost imports. The draft provided that such imports could be restricted only to their level in the year ending June 1961. The Financial Secretary and the Director of the Hong Kong Government Office in London, who attended as members of the British delegation, represented Hong Kong at this conference. They gave notice of a number of reservations on the text of the draft.

Government, which had maintained close consultation with the Cotton Advisory Board, was reluctant to subscribe to the interim agreement until these reservations were fully considered and some indication had been given of the effects of implementation in its principal market, the United States. In these circumstances, Britain refrained from signing and had still not ratified the agreement at the time of the second conference to give preliminary considera- tion to long-term arrangements for world trade in textiles held at Geneva in October. Hong Kong's representatives were the same as at the earlier conference. Although assurances by the United

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