XN000022-1986-07-10 — Page 7

THURSDAY, JULY 10, 1986

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COMMENTING ON THE TALKS, HE SAID THAT WHILE SOME PROGRESS HAS BEEN MADE, MUCH REMAINED TO BE DONE. THE NEGOTIATIONS WERE CONDUCTED IN FRIENDLY ATMOSPHERE, AND THERE WAS A PRELIMINARY DISCUSSION OF POSSIBLE MODEST IMPROVEMENTS IN THE AGREEMENT.

HOWEVER, THE TALKS WERE SLOWED AND COMPLICATED BY EEC PROPOSALS TO ALTER THE PRODUCT COVERAGE OF A NUMBER OF CATEGORIES, MAINLY IN ORDER TO ANTICIPATE THE INTRODUCTION OF THE HARMONISED SYSTEM (A NEW STANDARD CLASS IF ICATION SYSTEM IN WHICH HONG KONG WILL ALSO BE TAKING PART, PLANNED TO TAKE EFFECT IN 1988).

BOTH SIDES AGREED TO WORK TOGETHER AT THE TECHNICAL LEVEL BETWEEN ROUNDS TO ACHIEVE AN AGREED BASIS OF CALCULATION FOR THE PROPOSED CATEGORY CHANGES. THIS WOULD THEN PROVIDE A SOUND BASIS ON WHICH TO EVALUATE THE EEC'S OFFER, WHICH HONG KONG MADE CLEAR DID NOT MEET HONG KONG'S REASONABLE EXPECTATIONS, PARTICULARLY BEARING IN MIND HONG KONG'S OPEN MARKET AND ITS DECLINING SHARE IN THE EEC MARKET.

THE HONG KONG DELEGATION WILL REMAIN IN BRUSSELS BETWEEN THE TWO ROUNDS. AS THE EEC'S PROPOSALS SUCH AS THOSE ON RE-CATEGORISATION ARE COMPLEX AND COULD HAVE SIGNIFICANT IMPACT ON HONG KONG'S TRADE, THE TEXTILES ADVISORY BOARD (TEXTAB) WILL JOIN THE DELEGATION IN BRUSSELS,

THIS WOULD FACILITATE CONSULTATIONS AND ENABLE THE HONG KONG DELEGATION TO OBTAIN ADVICE ON THE SPOT.

THE CHAIRMAN OF TEXTAB, MR E.P. HO, WILL ARRIVE IN BRUSSELS ON JULY 16.

IT IS NOT YET CLEAR WHETHER IT WILL BE POSSIBLE TO FINISH THE NEGOTIATIONS IN THE TIME AVAILABLE. PROBABLY ONLY JULY 17 TO 19, AND THE POSSIBILITY OF CONTINUING THE ROUND IN AUGUST- SEPTEMBER HAS BEEN LEFT OPEN, TO BE RE-ASSESSED IN THE LIGHT OF PROGRESS,

DEADLINE EXTENDED FOR TRADE RETURNS

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THE DEADLINE FOR SUBMISSION OF SHIPMENT RETURNS FROM EXPORTERS FOR QUOTA AND ENTITLEMENT ALLOCATION FOR GARMENTS (INCLUDING SWEATERS) OF SILK BLEND AND OTHER VEGETABLE FIBRE HAS BEEN EXTENDED FROM JULY 12 TO JULY 16.

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ANNOUNCING THIS TODAY (THURSDAY) A TRADE DEPARTMENT SPOKESMAN SAID THE EXTENSION WAS TO GIVE EXPORTERS MORE TIME TO PREPARE THEIR RETURNS.

THE SPOKESMAN