XN000022-1986-01-03 — Page 2

FRIDAY, JANUARY 3, 1986

HECTIC TRADE YEAR AHEAD

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+1986 IS LIKELY TO BE A HECTIC YEAR ON THE TRADE FRONT,+ SAID DIRECTOR OF TRADE, MR HAMISH MACLEOD TODAY.

THE CURRENT MULTI-FIBRE ARRANGEMENT (MFA) WHICH GOVERNS A LARGE PART OF WORLD TRADE IN TEXTILES, IS DUE TO EXPIRE IN JULY 1986 AND NEGOTIATIONS ON ITS FUTURE STARTED LAST YEAR.

IN THE COURSE OF THESE PRELIMINARY TALKS, HONG KONG HAS BEEN WORKING CLOSELY WITH OTHER DEVELOPING TEXTILE-EXPORTING COUNTRIES TO PUSH FOR LIBERALISATION OF TRADE IN TEXTILES AND CLOTHING, HE SAID, WHILE IT WOULD NOT BE REALISTIC TO EXPECT FREE TRADE IN THIS SECTOR, WE ARGUE THAT AT LEAST WE SHOULD SEE A SIGNIFICANT MOVEMENT IN THIS DIRECTION ANY NEW ARRANGEMENT SHOULD BE LESS RESTRICTIVE THAN IN THE PAST.

+CLEARLY PROTECTIONIST PRESSURES IN THE USA IN PARTICULAR WILL NOT MAKE THIS EASY TO ACHIEVE IN PARTICULAR THEY CLEARLY SIGNALLED IN JULY THEIR WISH TO HAVE THE PROBLEM (AS THEY SEE IT) OF NON-MFA TEXTILES SUCH AS SILK, RAMIE AND LINEN ADDRESSED. NEVERTHELESS, THERE IS A STRONG BODY OF OPINION THAT WE MUST MOVE IN A LIBERAL DIRECTION, EVEN AMONG SOME IMPORTING COUNTRIES.+

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DURING THE PAST YEAR, THERE WERE ALSO EXTENSIVE DISCUSSIONS IN THE GATT ON BEGINNING A NEW ROUND OF MULTILATERAL TRADE NEGOTIATIONS TO FURTHER LIBERALISE WORLD TRADE AND REAFFIRM THE COMMITMENT OF CONTRACTING PARTIES TO OBSERVE THE DISCIPLINES OF THE AGREEMENT.

AGREEMENT WAS REACHED AT THE GATT'S ANNUAL MEETING IN GENEVA TO SET UP A PREPARATORY COMMITTEE TO PAVE THE WAY FOR A NEW ROUND OF INTERNATIONAL TRADE TALKS. THE PREPARATORY COMMITTEE IS DUE TO REPORT ITS FINDINGS IN JULY 1986.

THE CURRENT BILATERAL TEXTILES AGREEMENT BETWEEN HONG KONG AND THE EUROPEAN ECONOMIC COMMUNITY WILL EXPIRE BY THE END OF THIS YEAR AND SUBSTANTIVE TALKS WILL BE HELD WITH THE EEC COMMISSION ON A POSSIBLE SUCCESSOR AGREEMENT.

+THE EEC COMMISSION HAS SIGNALLED A CERTAIN DEGREE OF FLEXIBILITY TOWARDS THE MFA AND THE BILATERAL TEXTILES NEGOTIATIONS. BUT IT'S STILL EARLY DAYS AND THERE IS NO ROOM FOR COMPLACENCY GIVEN THE CONFLICTING INTERESTS BETWEEN DIFFERENT MEMBER STATES IN THE EUROPEAN COMMUNITY, WHICH HAS BEEN ENLARGED THIS YEAR THROUGH THE ACCESSION OF SPAIN AND PORTUGAL,+ MR MACLEOD SAID.

THE OTHER MAJOR TEXTILES AGREEMENT TO EXPIRE IN 1986 IS THAT WITH CANADA, WHERE PROTECTIONIST SENTIMENT IS QUITE HIGH. THE EEC'S 1986 GENERALISED SYSTEM OF PREFERENCES CONTINUES TO GIVE PREFERENTIAL TREATMENT TO HONG KONG IN RESPECT OF ALL PRODUCTS. ALBEIT AT A REDUCED QUOTA LEVEL FOR 12 ITEMS FOR WHICH EXCLUSION WAS ORIGINALLY PROPOSED BY THE COMMISSION.

HE SAID,