ENG-1962 — Page 112

INDUSTRY AND TRADE

83

25th October the British Embassy in Bonn received a verbal note formally requesting restraint at a level of 700,000 dozen woven cotton shirts during the first year of the Long Term Arrangement, starting 1st October 1962. The figure was considerably higher than declared exports during the base period appropriate under the Arrangement and the Hong Kong Government, on the advice of the Cotton Advisory Board, agreed to restrict exports to the maximum requested by the West German Government, subject to certain conditions and reservations.

The local textile industry continued to show sympathy with Lancashire and to be prepared to limit cotton textile exports to the United Kingdom. On the advice of the Cotton Advisory Board, Government offered to limit shipments of cotton piecegoods and made-ups to the United Kingdom for a further period of three years beginning 1st January 1963 at the annual level of 185 million square yards in force for 1962. In addition, Hong Kong offered to restrict exports of cotton yarn to the quantity shipped in 1961, i.e. 6,300,000 pounds, and to introduce this limitation in 1962. Both offers were conditional on India and Pakistan agreeing to similar limitations. The United Kingdom Government accepted the offers in October. At the end of the year, efforts were being made to establish a formula for calculating supplementary quotas for cotton yarn on the basis of the existing formula for piecegoods. The latter did not, in the event, give rise to any supplementary quotas during 1962.

!

During the year the Colony also experienced textile difficulties of a different kind as a result of a steep rise in the imports of worsted hosiery yarn from Japan. The rise followed a sharp drop in Japanese prices, and imports by the end of May had reached the figure of two million pounds as against the voluntary annual quota of 1,600,000 pounds agreed to by the Japanese industry in 1960. Local consumption had increased greatly since then, follow- ing the switch by Hong Kong manufacturers from knitting gloves to sweaters and other outerwear, which resulted in a rapid increase in imports. After discussions between the local spinners and the Japanese industry, Japan agreed to introduce an annual quota on worsted hosiery yarn of three million pounds from 1st September.