trade agreements with supplier countries under the MFA were also
renewed including that with Hong Kong. (UK argued strongly in the
EC for increases in Hong Kong's access levels that would
differentiate between Hong Kong's open market and the higher imort
bariers of countries like South Korea, another dominant supplier.
In the event the increases in access levels offered were not as
great as Hong Kong had hoped although there was modest
differentiation in its favour as compared with the Korean
agreement).
13.
In the GATT round Contracting Parties are committed to
examining "modalities" for returning textiles and clothing to normal
GATT disciplines on the basis of strengthened GATT rules.
14.
Discussions in the Negotiating Group on Textiles and Clothing
are expected to progress slowly. Although the supplier countries
are pushing for a timetable to dismantle the MFA, the developed
countries have pointed out that much depends on results in other
Groups particularly the Group dealing with Safeguard measures (a
point accepted by Hong Kong). We are also looking to exploit the
possible removal of the MFA as a lever to encourage the more
developed LDCs to accept the responsibilities (such as opening their markets) as well as the benefits of GATT.
US Textiles Bill
15.
Hong Kong has been greatly concerned about the highly
protectionist Textile and Apparel Trade Bill which would limit
textile imports from all sources to present levels with annual
growth rates of 1%. The Bill's provisions are GATT-illegal and
would seriously damage MFA. The Bill's supporters are currently
waiting to see what happens to the Omnibus Trade Bill before moving
for a Senate vote.
The US Administration opposes the Bill and the President is
expected to veto it if it passes through the Congress. Both UK Ministers and Commissioner de Clerq protested strongly (with
Administration encouragement) and threatened retaliation against an unspecified range of US products.