XN000022-1983-08-25 — Page 8

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THURSDAY, AUGUST 25, 1983

+OF COURSE THE BENEFITS WOULD HAVE BEEN MUCH GREATER - AND HONG KONG WOULD HAVE BEEN MUCH HAPPIER - IF 100 PER CENT OF OUR EXPORTS TO THE US HAD ENJOYED GSP TREATMENT, BUT WE RECOGNISE THAT THIS IS NOT REALISTIC,+ MR CHAN SAID.

HE SAID THAT EVEN WHEN WE CONSIDERED ONLY THE 3 000 CATEGORIES INCLUDED IN THE GSP, THE PROPORTION OF HONG KONG'S EXPORTS BENEFITING FROM THE GSP WAS NO MORE THAN 30 PER CENT.

+NEVERTHELESS, THE DUTY-FREE TRADE WAS WORTH ABOUT US$800 MILLION IN 1982. FURTHERMORE, THE GSP HAS CONTRIBUTED DIRECTLY TOWARDS THE DIVERSIFICATION OF OUR EXPORTS TO THE U.S.,+ MR CHAN SAID.

MR CHAN SAID HE HAD THREE REASONS FOR CHOOSING TO SPEAK ON THE TOPIC: 'THE SIGNIFICANCE TO HONG KONG OF THE US GSP'.

FIRST, IT WAS IMPORTANT, BECAUSE THE U.S. WAS THE LARGEST SINGLE MARKET FOR HONG KONG'S DOMESTIC EXPORTS. IN 1982, HONG KONG EXPORTED ABOUT HK$30 BILLION WORTH OF GOODS TO THE U.S. UNDER THE GSP, SOME 15 PER CENT OF THESE GOODS ENTERED THE U.S. DUTY-FREE.

+SECOND, IT IS A TOPICAL SUBJECT, MR CHAN SAID. +CURRENT U.S. LEGISLATION ON THE GSP WILL EXPIRE IN JANUARY 1985. THE U.s. ADMINISTRATION HAS RECENTLY SUBMITTED A BILL TO CONGRESS SEEKING TO EXTEND THE SYSTEM FOR 10 YEARS AND CONGRESS IS HOLDING PUBLIC HEARINGS ON THE BILL.+

+THIRDLY, IT IS A CONTROVERSIAL SUBJECT. THERE IS A STRONG SENTIMENT IN THE U.S. CONGRESS THAT HONG KONG, SOUTH KOREA AND TAIWAN, AND POSSIBLY ONE OR TWO OTHERS, ARE ALREADY TOO ADVANCED AND SHOULD NOT CONTINUE TO BE GIVEN GSP TREATMENT. WITH THIS WE STRONGLY DISAGREE,+ MR CHAN SAID.

MR CHAN SAID THAT THE U.S. GSP BEGAN IN 1976. BASICALLY, IT PROVIDED FOR IMPORTS INTO THE U.S. FROM DEVELOPING COUNTRIES AND TERRITORIES TO BE ADMITTED DUTY FREE, PROVIDED THEY MET CERTAIN ORIGIN RULES.

THERE WERE, HOWEVER, SOME IMPORTANT EXCEPTIONS:

NOT ALL PRODUCTS WERE INCLUDED IN THE GSP. ITEMS OF WHICH IMPORTS FROM DEVELOPING COUNTRIES WERE CONSIDERED TO POSE A THREAT TO U.S. ÍNDUSTRY WERE EXCLUDED. FOR EXAMPLE, THE U.S. GSP DID NOT COVER TEXTILES AND CLOTHING ITEMS SUBJECT TO TEXTILE AGREEMENTS, CERTAIN TYPES OF FOOTWEAR, WATCHES, CERTAIN ELECTRONIC PRODUCTS, AND SO ON.

UNDER A +COMPETITIVE NEED+ RULE, ONCE U.S. DUTY-FREE IMPORTS OF A PRODUCT FROM A BENEFICIARY REACHED 50 PER CENT OF TOTAL U.S. IMPORTS OF THAT PRODUCT, OR A CERTAIN VALUE (AT

AUTOMATICALLY PRESENT US$53.3 MILLION), THE BENEFICIARY WAS DENIED FURTHER DUTY-FREE ENTRY OF THE PRODUCT.

/SINCE 1981,