INDUSTRY AND TRADE
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months. The Australian Government also indicated that it would shortly be initiating negotiations with low-cost supplying countries with a view to arriving at mutually acceptable arrangements for voluntary restraint.
Canada: Following consultations in Hong Kong with Canadian officials in August 1971, the Hong Kong/Canada textiles agreement was renewed for a further year, and was extended to cover two new categories, cotton yarns and knitted sweaters of wool and man-made fibre.
Under legislation passed in May 1971, the Canadian Export and Import Permits Act was amended to enable the introduction of quantitative import restrictions for protective purposes. During the year, the Canadian Textile and Clothing Board concluded a number of investigations, including those on cotton yarns and shirts. As a result of recommendations by the Textile and Clothing Board, the Canadian Government announced that import control on certain woven and knitted shirts would be introduced with effect from November 30, 1971. Following consultations in Ottawa, however, the Canadian authorities agreed that Hong Kong should continue to exercise export control, subject to the ambit of the restraint being extended to certain knitted shirts previously unrestrained.
Denmark: In October, the Danish Government, which faced balance of payments difficulties, introduced a 10 per cent surcharge on all imported goods except raw materials for industrial use, minor quantities of food-stuffs and oil products. The surcharge was applied to imports from all countries without discrimination. In 1971 Hong Kong's domestic exports to Denmark were valued at $107 million of which $83 million or 78 per cent were textile manufactures.
The European Economic Community: The European Economic Community announced in January 1971 that it would include Hong Kong among the beneficiaries of its generalised scheme of preference for developing countries. The scheme was introduced on July 1.
The Treaty of Rome establishing the European Economic Com- munity provided that a Common Commercial Policy regarding the external trade of Member States should be achieved by the end of the transitional period, i.e. December 31, 1969. Although for a variety of reasons, this has not yet been implemented, considerable progress has been made and further progress was achieved during the year. The Hong Kong Government continued to watch these developments closely and to examine the implications for Hong