INDUSTRY AND TRADE
Re-exports
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Re-exports showed very significant increases in 1988, and now account for 56 per cent of the combined total of domestic exports and re-exports. The principal commodities re-exported were textiles ($34,375 million); electrical machinery, apparatus and appliances ($28,661 million); miscellaneous manufactured articles ($28,328 million); clothing ($24,697 million); telecommunications and sound recording and reproducing apparatus and equip- ment ($19,858 million) as well as photographic apparatus, equipment, supplies and optical goods, watches and clocks ($10,597 million). The main places of origin of these re-exports were China, Japan, Taiwan and the United States. The largest re-export markets were China, the United States, Japan, Taiwan and the Republic of Korea.
External Commercial Relations
Hong Kong believes in free trade. The aims of Hong Kong's external commercial relations policy are thus to safeguard its rights and to discharge its obligations in the pursuit of free trade. The most important of these rights and obligations are contained in the General Agreement on Tariffs and Trade (GATT) and the Multi-Fibre Arrangement (MFA).
Textiles
Textiles trade is the major sector that has been hardest hit by restraints. Bilateral agreements negotiated under the MFA govern Hong Kong's textiles exports to Aus- tria, Canada, the European Economic Community, Finland, Norway, Sweden and the United States.
As a result of the consultations held in May 1988, the Hong Kong/Finland Textiles Agreement (1987–91) was amended to include an additional export authorisation item and an additional restraint item, the quota level of which took into account previous levels of export plus growth.
Improvements to the current Hong Kong/Norway Textiles Agreement (1987-90) were achieved during bilateral consultations held here in October. These included the complete liberalisation of three restraint items and abolition of the entire export authorisation arrangement.
Following consultations held in Hong Kong in October/November, an additional item was brought under restraint under the Hong Kong/Austria Textiles Agreement (1987–90) whereas part of an existing restraint item was derestrained and came under the export authorisation arrangement.
The current bilateral textiles agreement between Hong Kong and the EEC governs Hong Kong's exports of cotton, man-made fibres and wool textiles to the 12 member states of the EEC from 1987-91. Four rounds of consultations between Hong Kong and the EEC were held in 1988 to address problems arising from changes of product definitions or codings on the adoption of the Harmonised System by the EEC. Agreement was reached on adjustments to the quota levels of four categories of textile products restrained under the bilateral textiles agreement.
Five rounds of consultations in 1987 were required to reach agreement with United States changes to the HK/US Textiles Agreement (1986-91) to take account of the United States' adoption of the Harmonised System. In the event, Congress' approval of the Harmonised System was delayed, so pending full adoption of the new arrangements by the United States, Hong Kong implemented a dual licensing system as from January 1, 1988 for textile exports to the United States to facilitate customs clearance.
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