ENG-1966 — Page 92

INDUSTRY AND TRADE

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Kong's exports of cotton textiles to the United States, Canada, Norway, the Federal Republic of Germany and the Benelux coun- tries were under restraint, to a greater or lesser extent, as a result of agreements reached in accordance with the provisions of the arrangement. A five-year comprehensive bilateral agreement cover- ing all cotton textile exports, with retrospective effect from 1st October 1965, was negotiated with the United States. This agreement provided for an aggregate limit of 322.5 million square yards during the first year, compared with total exports of 291.1 million square yards during the preceding year. An annual growth factor of 5 per cent, and greater flexibility, were additional features of the agree- ment, the operation of which was reviewed in consultations held in Washington in October and November.

A three-year bilateral agreement with Canada was negotiated and signed in November, but unlike that with the United States it covered only fabrics, the annual limit for which was agreed at 11.09 million square yards. The previous annual restraints on five garment categories were extended for a further year. In October the Federal Republic of Germany expressed concern at the level of cotton textile imports from Hong Kong and requested negotia- tions with a view to a bilateral agreement on restraint covering six groups of products. Negotiations were held in Hong Kong in December, the results of which were still to be confirmed by both governments. Following representations from the Benelux Govern- ments, Hong Kong agreed in March to restrain exports of cotton woven shirts. In subsequent negotiations certain differences prompted the Benelux authorities to impose import restrictions, but these differences were resolved in November and agreement was reached on export control in Hong Kong in the two categories of shirts con- cerned, the period of restraint being extended up to 30th September 1967.

Outside the ambit of the Long-Term Arrangement, Hong Kong's exports to Britain of cotton yarn, cotton woven piecegoods and clothing were limited under an agreement reached early in 1966. This agreement, which runs for five years, followed the expiry of the previous three-year undertaking. It provided for the export in 1966 of 6.3 million pounds of cotton yarn and 185 million square yards, or its equivalent, of cloth; of the latter, 30 million square yards could be shipped as finished piecegoods and up to 85 million