Cotton Din

At the same time that President Kennedy's lieutenants were pleading with Congress to enact the tariff-slashing trade-expansion bill (see THE NATION), his Administration put what amounted to an embargo on many kinds of textile imports from Hong Kong. The two moves seemed contradictory, but they were closely related. Politicking for his trade bill. President Kennedy has been wooing Southern protectionists in Congress, hopes to win their votes by making concessions to their cherished domestic textile industry.

Hong Kong has been flooding the U.S.

with low-priced cottons, has exported almost as much in the past five months as it did in the previous twelve. To plug the flow, the U.S. invoked a gentleman's agreement--approved by 16 countries in Geneva last summer--which says that a country whose textile markets are disrupted by another country's exports can sharply restrict them. With that in hand, the Administration last week shut off imports of eight kinds of Hong Kong cotton textiles, including sweaters, shirts, raincoats and ginghams.

Whatever the justification for the U.S.

action, it was certain to set back the fragile economy of Hong Kong, which is capitalism's showcase on the China coast and faces some harsh facts of life. It is crammed with 1,000,000 refugees from Red China, and it must export to survive.

With hard work, low wages and a predilection for free enterprise. Hong Kong has done very well lately. Light industries have blossomed on its steep hills, and exports have risen 76% since 1954 to $745 million--much of it in textiles.

The U.S. crackdown, growled the English-language Tiger Standard, "is certain to trigger Hong Kong's worst financial and industrial crisis since the end of the war." At week's end Hong Kong textile mills were planning to cut production 25% to 30%, as many as 40,000 workers stood to lose their jobs, six ships were on the high seas carrying Hong Kong cottons that could be impounded if unloaded in the U.S., and a team of Hong Kong officials nervously set off for Washington to see if anything might be done.

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