XN000022-1988-07-08 — Page 10

FRIDAY, JULY 8, 1988

NEED FOR MULTILATERAL APPROACH TO WORLD TRADE

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SIMILAR TO EROSION OF

ANY PROLIFERATION OF BILATERAL TRADE ARRANGEMENTS THE U.S.-CANADA FREE TRADE AGREEMENT COULD RESULT IN AN THE MULTILALTERAL TRADING SYSTEM, HONG KONG'S MINISTER IN THE UNITED STATES, MR PETER LO, SAID IN SEATTLE TODAY (FRIDAY).

ADDRESSING DELEGATES AT A THREE-DAY SEMINAR ORGANISED BY THE MANSFIELD CENTRE FOR PACIFIC AFFAIRS IN SEATTLE, WASHINGTON STATE, MR LO EMPHASISED THAT THE WORLD TRADING SYSTEM HAD TRADITIONALLY BEEN BASED UPON THE PRINCIPLE OF MULTILATERALISM AS ENSHRINED IN THE GATT.

"ANY PROLIFERATION OF BILATERAL FREE TRADE AGREEMENTS IS BOUND TO BE CHARACTERISED BY AN ARRAY OF DIFFERENT AND SPECIAL PROVISIONS TO TAKE ACCOUNT OF THE CIRCUMSTANCES AND REQUIREMENTS OF COUNTRIES CONCERNED, MR LO POINTED OUT.

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"THE RESULT OF ALL THESE SPECIAL EXCEPTIONS WOULD BE FURTHER THE MOST-FAVOURED-NATION PRINCIPLE AND SERIOUSLY THE GATT AS AN INSTRUMENT FOR MULTILATERAL RULES AND AS A MULTILATERAL NEGOTIATIONS,

..

INDIVIDUAL

TO ERODE UNDERMINE

FORUM FOR

TWO

TURNING TO OTHER ASPECTS OF THE FTA, MR LO PINPOINTED ELEMENTS OF THE AGREEMENT WHICH HE BELIEVED COULD PROVE HELPFUL IN THE PROCESS OF TRADE LIBERALISATION IN THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS.

"THE FIRST ELEMENT IS IN THE DISPUTE WHICH PROVIDES FOR BINDING ARBITRATION OF TRADE NOT AT PRESENT AVAILABLE IN THE GATT, HE SAID.

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SETTLEMENT MECHANISM DISPUTES, A FEATURE

"THE SECOND ELEMENT WHICH MAY ULTIMATELY PROVE HELPFUL IS IN THE AREA OF SERVICES WHERE A FRAMEWORK OF GENERALLY APPLICABLE RULES HAS BEEN AGREED."

EXPANDING ON THE THEME OF TRADE IN SERVICES, MR LO SAID HE BELIEVED HONG KONG COULD SUPPORT A MULTILATERAL FRAMEWORK GOVERNING SUCH TRADE WHICH WOULD REFLECT THE FUNDAMENTAL PRINCIPLES OF MOST FAVOURED NATION, NON-DISCRIMINATION, TRANSPARENCY AND NATIONAL TREATMENT.

MOST OPEN

HONG KONG ALREADY PROVIDES ONE OF THE WORLD'S ENVIRONMENTS FOR THE TRADE IN SERVICES. BY ALLOWING RELATIVELY UNFETTERED ESTABLISHMENT OF FOREIGN SERVICE PROVIDERS, HONG KONG HAS BENEFITTED FROM A HIGHLY COMPETITIVE SITUATION THAT HAS ENSURED A RANGE OF HIGH QUALITY SERVICES, NOT ONLY FOR DOMESTIC CONSUMPTION BUT ALSO FOR EXPORT.

"COMPETITION FROM

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