6
Friday, January 27, 1978'
Trade prospects have of course been complicated and restricted by
the new bilateral textiles agreement, particularly that with the EEC.
Although the restraint limits in 1978 are generally higher than the level of
shipments in 1977, the flexibility with which exporters will be able to
respond to a revival in demand has been reduced; more products have been
brought under restraint; the rate of growth of the restraint levels has
been reduced; and flexibility to move between products is much less.
In addition, the EEC agreement has set a dangerous precedent. The
Norwegians and Swedes have already followed it and proposed substantial cuts.
Although trade with these countries represents only a small proportion
of our domestic exports, the implications are depressing and could be
serious if Sweden and Norway were joined by other countries.
As I have already said there is the further danger, and at present
it is no more than that so far as Hong Kong products are concerned,
of the extension of protectionism to other products.
Against this background, it is obviously difficult to assess
our export prospects with any accuracy. Nevertheless, at present the
balance of opinion suggests that growth in our domestic exports in 1978
is likely to be no less than in 1977. In other words, though the
problems will be different, and the balance between different markets
or lines of export may change, the overall growth rate for exports is
likely to be similar to 1977..
'I think that the sort of steady rather than frenetic growth in
exports and in the economy which we experienced last year was what suits
Hong Kong best, and the prospect of much the same overall picture next
year is heartening. As I said in speaking to the Legislative Council last
October, the picture could be greatly improved, at least in the short-term,
were measures taken to stimulate the economies of any of our major markets
and this is still not impossible.
We have