INDUSTRY AND TRADE
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international trade in textiles, provides the framework within which Hong Kong negotiates bilateral restraint agreements with textile importing countries.
GATT
Hong Kong is the world's 10th largest trading entity in terms of the value of its merchandise trade. Given the externally-orientated and open nature of its economy, Hong Kong contributes to, and relies on, the healthy functioning of the multilateral trading system. Hong Kong has, therefore, always been a staunch supporter of the GATT and the free trade principles it espouses. Hong Kong participated in the activities of the GATT for many years as a British dependent territory before becoming a separate contracting party to the GATT in 1986. This status, which underlines Hong Kong's autonomy in the conduct of its external commercial relations, will extend beyond 1997.
During the year, Hong Kong continued to participate actively and constructively in the extended GATT Uruguay Round of multilateral trade negotiations. The draft final package of agreement reached in late 1991 was used as a basis for further negotiation and progress was made in various negotiating areas although some major problems remain unsolved.
Hong Kong has continued to work closely with other exporters of textiles and clothing in the International Textiles and Clothing Bureau to press for the phasing out of MFA restrictions and the integration of the textiles sector into the GATT disciplines. Hong Kong = has played a pivotal role in forging consensus on the extension of the MFA, aimed to bridge the gap between the expiry of the MFA and the implementation of a Uruguay Round agreement.
Textiles
Bilateral agreements negotiated under the MFA govern Hong Kong's textile exports to Austria, Canada, the European Community (EC), Finland, Norway and the United States.
In September 1991, the United States Government published new classification guide- lines for knitted tights for women. The Hong Kong Government considered that the guide- lines amounted to a reclassification of the products concerned as trousers. Consultations were held between the two governments from November 1991 to July 1992. A settlement was subsequently reached in July 1992 with quota adjustments for women's and girls' cotton and man-made fibre trousers.
Pursuant to the Canadian proposal to introduce a new textile categorisation system based on the Harmonised Commodity Description and Coding System, three rounds of con- sultations were held between Hong Kong and Canada. Agreement was reached in October 1992 and the new Canadian categorisation system was implemented on January 1, 1993.
The bilateral textiles agreement with Norway expired in June 1992. Consultations in March 1992 resulted in a new 18-month Hong Kong/Norway Textiles Agreement from July 1, 1992 to December 31, 1993 with reduction in restraint and respectable improvements in growth. The number of categories under restraint was cut from five to three. In December 1992, Hong Kong also reached agreement with Austria on an eleven months' extension of the current Hong Kong/Austria textiles agreement which expired in January 1993. The new agreement, which represents meaningful improvements in market access over the current agreement, will be automatically extended to end-1994 if the Uruguay Round Agreement is not in force by January 1, 1994.