ENG-1972 — Page 42

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INDUSTRY AND TRADE

The formal US/Hong Kong Man-made Fibre and Wool Textiles Agreement was signed on January 6, 1972. Under the terms of this agreement, Hong Kong agreed to restrain its exports of wool and man-made fibre textiles to the United States for a period of five years, commencing October 1, 1971.

In accordance with the provisions of the agreements, consultations were held with the United States Government on a number of items including man-made fibre knit fabrics, where consultation levels had been reached.

Documentation of Exports

Import and export licensing formalities are kept to a minimum consistent with Hong Kong's international obligations. The most complex formalities are those resulting from Hong Kong's obligations to restrain certain exports of textile products.

With Hong Kong's economic dependence upon the export of manufactured goods, most of them made from imported materials, and the concurrent existence of a substantial re-export trade, the operation of an origin certification system satis- factory to overseas customs authorities is vitally important. The Commerce and Industry Department issues certificates of origin and accepts the responsibility for safeguarding the integrity of the entire Hong Kong certification system. To this end, close liaison is maintained with overseas authorities and with the authorised non- government certificate-issuing bodies, i.e. the Hong Kong General Chamber of Commerce, the Indian Chamber of Commerce, the Federation of Hong Kong In- dustries, and the Chinese Manufacturers' Association of Hong Kong. The value of domestic exports covered by certificates of Hong Kong origin issued by the five organisations during the year was $9,877 million. Of this, $5,084 million represented the value of exports supported by departmental certificates of origin.

Britain and a number of other Commonwealth countries grant preferential rates of duty to Hong Kong products. In order to support claims to preference, the depart- ment issues Commonwealth Preference Certificates against legal undertakings given by manufacturers to use only Commonwealth raw materials or detailed cost state- ments prepared by accountants authorised for the purpose. The value of goods exported under these certificates during the year was $1,598 million. However, the value of this trade is likely to decline significantly over the next few years as Britain, now having entered the European Economic Community, has announced that it will phase out the present Commonwealth preferential rates of duty completely by the middle of 1977.

Following the introduction of the European Economic Community's Generalised System of Preferences in favour of developing countries on July 1, 1971, a number of other donor countries put their schemes into operation in 1972, including them were the United Kingdom, New Zealand, the Republic of Ireland, Sweden, Switzerland, Austria and Japan. Hong Kong is a beneficiary under all these schemes. The value of exports in 1972 covered by Generalised Preference Certificates, which in Hong Kong are issued only by the Commerce and Industry Department, amounted to $658 million.