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INDUSTRY AND TRADE
Asian region which accounted for a 68 per cent share or $9,004 million of re-exports. Sizable increases were recorded in the re-exports to Japan (which reached a total of $2,282 million), Singapore ($1,390 million), Indonesia ($1,302 million) and the United States ($1,232 million). The main countries of origin of these re-exports were China, Japan and the United States.
International Commercial Relations
Hong Kong's external commercial relations are conducted by the Trade Industry and Customs 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. All these restraint arrangements come under the umbrella of the Arrangement Regarding International Trade in Textiles, com- monly known as the Multi-Fibre Arrangement (MFA). A feature of the MFA is the Textiles Surveillance Body (TSB) which supervises its implementation. A Hong Kong representative sat on the TSB as a full member in 1977 and as an alternate member to the Republic of Korea in 1978.
As a result of negotiations under the MFA, bilateral agreements were concluded during the year with Austria, Canada, Finland, Sweden and Switzerland. Under the terms of the agreements, exports of certain textiles from Hong Kong to these countries were placed under restraint or surveillance.
The current bilateral agreement with the European Economic Community (EEC) has a duration of five years from January, 1978, and covers all of Hong Kong's exports of cotton, man-made fibres and wool textiles to the EEC. Exports in 41 categories of textile products are under specific restraint, while exports in the remaining categories are subject to the Export Authorisation System operated by the Trade Industry and Customs Department.
A textile agreement between Hong Kong and the United States came into effect on January 1, 1978. The five-year agreement covers all of Hong Kong's exports of cotton, man-made fibres and wool textiles to the United States.
In 1978 Hong Kong held consultations with the United States, at the latter's request, on exports of non-rubber footwear from Hong Kong to the United States. As a result, exports of non-rubber footwear from Hong Kong became subject to export licensing as from October, 1978. Under this administrative arrangement, Hong Kong footwear for export to the United States must be covered by certificates of Hong Kong origin. However no quantitative limitation was imposed on exports.
Following the introduction by Norway of discriminatory restrictions on imports of certain textiles from Hong Kong at the beginning of the year, consultations were held between the two governments in May in an attempt to reach a mutually acceptable bilateral agreement. The consultations were inconclusive and Hong Kong referred the matter of the discriminatory restrictions to the GATT Council. On the council's recommendation, a further round of consultations was held at the end of June, after which Norway formally notified its decision to invoke Article XIX of the GATT and to introduce global import quotas on various textile items in 1979. As a substantial supplier of textiles to Norway, Hong Kong requested consultations with Norway