ENG-1965 — Page 76

INDUSTRY AND TRADE

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attract most-favoured-nation tariff treatment in the majority of overseas markets and are thereby also protected from discriminatory import restrictions. Unfortunately, the number of exceptions to this rule is growing and in the past year difficulties have arisen with Nigeria, Austria, the Sudan, Irish Republic and South Africa, and further difficulties have arisen with France. These difficulties have been not only outside the normal GATT rules, but also not covered by the special arrangements for cotton textiles, which are mentioned below. In addition, certain special difficulties have arisen in the United States market connected with customs valuation and marking. In the United Kingdom, the special import surcharge imposed in October 1964 on all items other than foodstuffs and raw materials was maintained throughout the year, although the rate of levy was reduced from 15 per cent to 10 per cent in late April. The levy itself and the United Kingdom Government's future intentions had an unsettling effect on trade particularly as, compared with other countries, a much larger proportion of Hong Kong's exports was affected.

Although the year was one of intense activity in the sphere of multilateral commercial policy, inasmuch as agreement was reached for the modification of the General Agreement on Tariffs and Trade by the addition of a new part covering the special needs of less developed countries, and the establishment of the Trade and Development Board as the permanent organ of the triennial UN Conference on Trade and Development, few practical results are yet apparent. Although there appears to be, for instance, widespread support for the idea of assisting the exports of less developed countries by granting them preferential entry to the markets of the highly industrialized countries of Western Europe and North America, at the end of the year under review a general scheme had still to be worked out in detail. There appears to be, at present, a danger that a number of individual initiatives may be taken following upon the application by the Australian Government for a GATT waiver to enable a limited scheme of selective preferences to be introduced for a specific list of less developed countries. Hong Kong has been included in this list, although the privilege of preferential entry is to be withheld from four items in respect of which Hong Kong is considered to be already sufficiently com- petitive in the Australian market. Progress in the Kennedy Round