16
International Economic Relations
INDUSTRY AND TRADE
Hong Kong's external commercial relations are conducted by the Commerce and Industry Department within the framework of a basically free trade policy. Hong Kong practises to the full the rules of the General Agreement on Tariffs and Trade (GATT) and virtually the only restrictions maintained on trade are those required by international obligations. Most prominent among these are restraints on textile exports to most major trading partners. These arrangements come under the umbrella of the Arrangement Regarding International Trade in Textiles, com- monly known as the Multi-Fibre Arrangement. Britain acceded to the MFA on behalf of Hong Kong in 1974. One of the features of the MFA is the establishment of a Textiles Surveillance Body (TSB) to supervise the implementation of the arrange- ment. At the invitation of GATT, a Hong Kong representative sat as a full member of the Textiles Surveillance Body during 1975.
As a result of negotiations under the MFA, a bilateral agreement was concluded during the year with the European Economic Community whereby exports of certain textiles from Hong Kong to the EEC were placed under restraint. The agreement came into effect on July 18, 1975 and will expire on December 31, 1977. Bilateral agreements were also concluded with Australia, Austria, Canada and Sweden.
Consultations were held in Oslo in June with the Norwegian Government regarding a new bilateral textiles agreement under the MFA. No agreement was reached and, pending the resumption of consultations, Hong Kong unilaterally in- troduced export restraints to Norway on six garment items for one year as from July 1.
Progress in the Multilateral Trade Negotiations (MTN) remained slow. The negotiations were launched in September 1973 in Tokyo, with the object of further liberalising world trade by the removal or reduction of tariff and non-tariff barriers. These negotiations are now expected to continue in 1976 and possibly beyond.
Another issue of considerable importance to Hong Kong concerns the various generalised preference schemes. Operated by most of the developed countries, these schemes are designed to assist the export of goods manufactured by the developing countries and they include provisions allowing duty-free or low tariff entry for prod- ucts from beneficiary developing countries.
The form, coverage and other provisions of the schemes differ from country to country and so the advantages vary. Hong Kong has been included as a beneficiary by most of the developed countries operating such schemes. It has consistently made it clear that it seeks no special advantages under these schemes, but objects to being discriminated against while countries which are in a similar state of development and are close trade competitors are given beneficiary status. Such discrimination was practised in respect of certain Hong Kong manufactured products by the EEC, Japan, Switzerland, Australia and Austria. This discrimination was the subject of continuing official exchanges, including visits to the countries concerned by officers of the Commerce and Industry Department.