XN000022-1986-10-02 — Page 2

THURSDAY, OCTOBER 2, 1986

HONG KONG AND EEC REACH AGREEMENT

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A BILATERAL TEXTILES AGREEMENT WAS AGREED EARLY TODAY (THURSDAY) BETWEEN HONG KONG AND THE EUROPEAN ECONOMIC COMMUNITY, A TRADE DEPARTMENT SPOKESMAN SAID.

THE AGREEMENT WILL RUN FOR FIVE YEARS FROM JANUARY 1, 1987 TO DECEMBER 31, 1991.

THE NEW AGREEMENT CONTAINS IMPROVEMENTS OF VARYING DEGREES OF SIGNIFICANCE FOR ALL CATEGORIES IN GROUP ONE - THE GROUP REGARDED BY THE EEC AS CONTAINING THE MOST SENSITIVE CATEGORIES. THIS GROUP ACCOUNTS FOR ABOUT HALF OF HONG KONG'S TEXTILE EXPORTS TO THE COMMUNITY. A NUMBER OF OTHER CATEGORIES, IN OTHER GROUPS, HAVE EITHER HAD RESTRAINTS LIFTED OR THEIR GROWTH RATES INCREASED.

THE AGREEMENT ALSO INCLUDES CHILDREN'S WEAR PROVISIONS FOR THE FIRST TIME IN THE FOUR CATEGORIES CONCERNED THIS MEANS THAT MORE CHILDREN'S CLOTHING CAN BE SHIPPED FOR A GIVEN AMOUNT OF QUOTA, WITHIN TIGHT LIMITS.

ANOTHER USEFUL NEW FEATURE IS THE +1NTER-REGIONAL TRANSFER+, WHICH PROVIDES LIMITED TRANSFER OF QUOTA FOR THE SAME PRODUCT BETWEEN MEMBERS STATES OF THE COMMUNITY, THE SPOKESMAN SAID.

THE NEW PACKAGE ALSO INCLUDES SOME MODEST IMPROVEMENTS IN FLEXIBILITY FOR GROUP ONE CATEGORIES AND PROVIDES FOR SOME +CARRYOVER+ AND +CARRYFORWARD+ OF QUOTA BETWEEN 1986 AND 1987.

FULL DETAILS OF THE AGREEMENT WILL BE ISSUED TO THE TRADE SHORTLY, HE ADDED.

COMMENTING FROM BRUSSELS ON THE OUTCOME, THE DIRECTOR OF TRADE, MR HAMISH MACLEOD, SAID: +IT HAS BEEN A MORE DIFFICULT NEGOTIATION THAN MOST HAD EXPECTED, GIVEN THE EEC WAS COMMITTED TO MOVING IN A LESS RESTRICTIVE DIRECTION.

+GENUINE PROBLEMS FOR BOTH SIDES WERE CAUSED BY THE INTRODUCTION OF THE HARMONISED SYSTEM. MOREOVER, INEVITABLY PERHAPS, WE DID NOT OBTAIN ALL THAT WE HAD HOPED FOR IN THE WAY OF IMPROVEMENTS.

→HOWEVER, ON BALANCE, IT IS A REASONABLE PACKAGE WE CAN LIVE WITH. ALTHOUGH GROWTH IS STILL VERY LOW IN THE LARGEST CATEGORIES, OUR ACCESS HAS AT LEAST BEEN IMPROVED SOMEWHAT BY VARIOUS MEANS

THEY AND ALTHOUGH THESE IMPROVEMENTS ARE CERTAINLY NOT DRAMATIC, ARE A USEFUL STEP IN THE RIGHT DIRECTION.

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+ WHILE OUR OPEN MARKET SEEMS TO HAVE PLAYED A PART IN THE FINAL OUTCOME IT IS ALSO UNFORTUNATELY TRUE THAT OUR SIZE AS ONE OF THE LARGEST EXPORTERS TO THE EEC HAS MEANT WE CONTINUE TO RECEIVE LOWER GROWTH RATES AND THE LIKE THAN MOST OTHER EXPORTERS,+ MR MACLEOD SAID.

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