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INDUSTRY AND TRADE
implemented during the year. The remainder are due to be introduced in stages and to be completed by 1972. In accordance with an agreement reached in the Kennedy Round, Hong Kong introduced on July 1, 1968 an excise duty rate on unmanufactured tobacco which eliminated the Commonwealth preference margin, with the exception that tobacco of Malawi origin continues to attract a preferential rate of duty.
In the textiles sector, the renewed GATT Arrangement regarding International Trade in Cotton Textiles commenced its first year on October 1, 1967. In the course of the year, Hong Kong's exports of cotton textiles to the United States, Canada, Norway, the Federal Republic of Germany, the Benelux and Sweden were restrained, to a greater or lesser extent, as a result of agreements reached in accordance with the provisions of the arrangement or the so-called Long Term Arrangement which preceded it. In February, the Australian Government requested restraint under the arrangement on a limited range of fabrics but, after consultations had been held in Hong Kong, withdrew their request.
Exports of cotton textiles to the United States continued to be restrained under the five-year Hong Kong/United States agreement. The restraint limit for the third year of the agreement, which ended on September 30, 1968, was 371.31 million square yards; for the fourth year this figure was increased to 389.86 million square yards.
The three-year Hong Kong/Canada bilateral agreement on cotton fabrics, which provides for an annual export restraint limit of 11.09 million square yards, entered its third year on October 1, 1968. Exports of certain items of cotton apparel which were restrained during the year ending September 30, 1968 were the subject of a new agreement signed in September, following discus- sions in Ottawa with the Canadian authorities. The new agreement, effective for one year from October 1, 1968, was similar to the previous one other than for a three per cent increase in the export limit for one of the restrained categories, improved flexibility provisions and the addition of a new category-cotton woven towels and industrial wiping cloths.
Hong Kong also extended for a further year its unilateral under- taking to restrain exports of certain garments made from polyester or polyester/cotton blends to Canada. The items involved, shirts,