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The Hong Kong Government immediately conveyed our serious concern about these measures to the US Administration, warned of their likely trade diversion impact on our textiles and clothing industry, and requested the immediate lifting of the measures. We also made clear our commitment to combat illegal transhipment activities. In the meantime, we have worked closely with the US authorities in an attempt to find a mutually satisfactory solution to the problem. We hope that, in the spirit of positive co-operation and partnership, the two sides will work out a mutually acceptable solution soon.
With regard to the trade performance of the ten categories subject to the additional measures, it is noted that the value of Hong Kong's exports in these categories to the US in the first seven months of 1996 (which are our latest available statistics) amounted to HK$1,763 million, or 5.4% less than the figure for the same period in 1995. The volume of concerned Hong Kong exports is tabulated in Annex A, which compares the 1996 position with that for 1995, for the periods January to June (before the imposition of the additional measures), July to September (after the imposition of the additional measures), and January to September. Nine of the ten affected categories registered a decrease in export volume, ranging between 7% to 59% in July-September 1996 as compared with the same period in 1995.
The Hong Kong Government does not keep statistics on the employment and wage situation of workers in the clothing industry at a category to category level. There is therefore no statistical information on the impact of the additional measures on workers involved in the production of the ten categories of products. It may be surmised that a decrease in orders and trade is likely to affect the level of employment and wage but it is not possible to draw any specific conclusions.
Since the imposition of the additional measures on Hong Kong, we have held two rounds of formal consultations and a series of informal exchanges with the US side. Following these consultations, the Hong Kong Customs and Excise Department invited their US counterpart to Hong Kong to conduct a joint visit programme in September. The purpose was to allow the US Customs officers to observe the operation of our control and enforcement systems at work. During the programme, joint teams of Hong Kong and US Customs officers visited over 130 factories that were involved in the production of the ten categories of products and had given consent to be visited. In line with Hong Kong's separate customs territory status and integrity of our customs jurisdiction, the joint visits did not involve any enforcement action by US Customs officers. For example, inspection of books and records and investigation of suspicious cases were conducted only by Hong Kong Customs officers. The US Customs officers observed the factory premises and production in process, and talked to management personnel and workers. The programme ended on 30 September and both sides are now reviewing the results.