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Speaking of rules of origin, Miss Lau pointed out that in the modern globalised economy, as the processes of sourcing, manufacturing and marketing of products rarely took place in one single country, it was difficult to decide where a particular product was made.
However, she said, rules of origin are still being applied in many aspects of trade activities and, in some instances, manipulated by individual players to protect their domestic industries.
"In reality, changes to rules of origin can be and are used as trade harassment tools and could create immense difficulties for businessmen in the conduct of trading activities on a daily basis," she said.
"We have bitter experiences in this respect. The textiles and clothing industry would have vivid memory of the disruption caused to our trade by the sudden change of US origin rules for certain restrained textiles and clothing products in 1984-85.
"More recently, the imposition of the new Mexican origin requirement last year created immense problems for our traders.
"And now, we are faced with another proposed change to origin rules for textiles and clothing products by the US which will take effect in July 1996."
Miss Lau said the best way to prevent abuse was to ensure the proper use of rules to achieve desirable objectives.
"To this end, we should continue to play our active and constructive part to promote free and open trade within a stable and effective multilateral trading system governed by fair and sound rules," she said.
"On top of this, it is also important that we work hard to ensure that improvements to existing systems of rules which are set out in the World Trade Organization Agreements are faithfully implemented.
"In the longer term, we should not lose sight of the need to explore how authorised rules could be further improved, enhanced or even replaced, in pursuit of free trade and competition."
End/Tuesday, May 16, 1995
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