INDUSTRY AND TRADE
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External Commercial Relations
Hong Kong possesses full autonomy in the conduct of its external commercial relations. The Governor has been formally entrusted with executive authority to conduct external relations on behalf of Hong Kong, namely to conclude and implement trade agreements, whether bilateral or multilateral, with states, regions and international organisations and to conduct all other aspects of external commercial relations. Hong Kong is a separate contracting party to the General Agreement on Tariffs and Trade (GATT), the basic aim of which is to liberalise world trade and protect the most-favoured-nation principle. GATT is the cornerstone of Hong Kong's external trade relations. The Multi-Fibre Arrangement (MFA), which aims at the orderly development and expansion of international trade in textiles, provides the framework within which Hong Kong negotiates bilateral restraint agreements with textiles importing countries.
The Hong Kong Government pursues a free trade policy. Hong Kong is one of the best examples of GATT principles in action and the success of the policy is evidenced by the steady rise in the value and sophistication of Hong Kong's exports in recent years. Within the context of this free trade policy Hong Kong's commercial relations are designed to ensure that Hong Kong's trading rights in overseas markets are protected and that its international obligations are fulfilled. The most important of these rights and obligations are contained in the GATT and the MFA.
-GATT
Hong Kong is the world's 11th largest trading entity. It has for a long time participated in the activities of the GATT. Prior to April 23, 1986, Hong Kong participated in the activities of the GATT as a British dependent territory. Since that date, however, Hong Kong has become a separate contracting party to the GATT. This status underlines Hong Kong's autonomy in the conduct of its external commercial relations and will transcend beyond 1997.
Given the externally-oriented and open nature of its economy, Hong Kong contributes to, and relies on, the healthy functioning of a multilateral trading system. Hong Kong has therefore always been a staunch supporter of GATT and the free trade principles it espouses. During the year, Hong Kong continued to participate actively in the final phase of the GATT Uruguay Round of multilateral trade negotiations which was launched in 1986 to strengthen the GATT rules and disciplines, to reverse protectionism and to further liberalise world trade. In December, Hong Kong participated at the Ministerial Meeting held in Brussels with a view to concluding the Uruguay Round. The Hong Kong delegation played a full and constructive part in many areas including textiles, anti-dumping and services, and useful work was done. However, the negotiations as a whole could not progress primarily because of a deadlock on agriculture. As a result, the meeting was concluded with a decision to extend the Round for a brief period.
Hong Kong worked closely with exporters of textiles and garments under the International Textiles and Clothing Bureau to press for the phasing out of MFA restrictions and integration of the sector into the GATT. In May, Hong Kong played host to Session XII of the bureau at which senior government officials from some 20 member countries exchanged views on the progress of the Uruguay Round negotiations on textiles and clothing. Hong Kong is also an active participant in the Asia Pacific Regional Consultative Group on the Uruguay Round of Multilateral Trade Negotiations which