ENG-1972 — Page 41

INDUSTRY AND TRADE

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Communities. The United Kingdom became a full member of the European Com- munities as from January 1, 1973.

In September, the Rt Hon Geoffrey Rippon, QC, MP, Chancellor of the Duchy of Lancaster and the Minister who was responsible for the United Kingdom's negotia- tions to join the European Communities, visited Hong Kong in the course of a tour of a number of Commonwealth countries to discuss Britain's accession to the European Communities and its effects on the countries concerned.

The United Kingdom's entry into the European Communities from January 1, 1973 will have important implications for Hong Kong. Commonwealth Preference will gradually be abolished. The United Kingdom will have to adapt its Generalised Preference Scheme to that of the enlarged European Economic Community on January 1, 1974. It will also have to comply with the Regulations and Directives adopted by the European Economic Community to achieve a Common Commercial Policy. During the year, the Hong Kong Government continued its study of the likely effects on Hong Kong of Britain's entry into the European Communities.

In early January, a delegation from Hong Kong led by the Financial Secretary had discussions with the British Government in London to consider the United Kingdom's sudden change of policy to reinstate quotas and at the same time impose a tariff on imports of cotton woven textiles from Hong Kong. Following these dis- cussions, Hong Kong agreed to continue with the restraint on cotton woven textiles exports to Britain in 1972.

Having regard to the United Kingdom's position as a member of the European Economic Community as from January 1, 1973, further consultations were held between the two governments in London in June to consider a new restraint arrange- ment for cotton woven textiles for 1973.

At the request of the British Government, further consultations were held in Hong Kong in August, and then in London in September and October, to consider a restraint arrangement for the export of woven polyester/cotton textiles from Hong Kong. An agreement was subsequently concluded whereby Hong Kong undertook to limit the export of woven polyester/cotton fabrics, garments and made-ups to Britain for a period of 15 months from October 1, 1972.

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In the course of these negotiations, the United Kingdom accepted Hong Kong's doctrinal position regarding the single market concept and agreed to the merging of the cotton and polyester/cotton quota limits under one combined limit. On the other hand, Hong Kong recognised the particular difficulties of the British industry, and agreed that the limits would not be shipped exclusively in either cotton or polyester/ cotton textiles. These limitations were expressed as sub-limits on cotton and polyester/ cotton within the combined aggregate limit.

United States of America: Exports of cotton textiles to the United States con- tinued to be restrained under a three-year agreement which commenced on October 1, 1970. The restraint limit for the textile year 1971-2 represented an increase of five per cent over that of the previous year.