ENG-1974 — Page 44

INDUSTRY AND TRADE

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Restraint arrangements governing the export of various textiles and garments to the European Economic Community (EEC) expired on December 31, 1973, but were unilaterally extended for a further year.

Little progress was made in the GATT Multilateral Trade Negotiations (MTN), which were launched in September 1973 in Tokyo with the object of further liberalising world trade by the removal or reduction of tariff and non-tariff barriers. A trade negotiations committee has been commissioned to prepare the ground work.

Another issue of considerable importance to Hong Kong concerns the various generalised preference schemes. These schemes, operated by most of the developed countries to assist the exports of manufactures by the developing countries, include provisions allowing duty-free or low tariff entry for products from beneficiary develop- ing countries.

The form, coverage and other provisions of the schemes differ from country to country and consequently the particular advantages offered vary. Hong Kong has been included as a beneficiary by all the developed countries operating such schemes, except Norway and Finland. Hong Kong has consistently made it clear that it seeks no special advantages under these schemes but objects to being discriminated against in favour of countries which are in a similar stage of development and are close trade competitors. Regrettably such discrimination was practised in respect of certain Hong Kong manufactured products by the EEC, Japan, Switzerland, Australia and Austria, This discrimination was the subject of continuing official exchanges, including visits to the countries concerned by officers of the Commerce and Industry Department.

The exclusion of Hong Kong from the enlarged EEC's generalised preference scheme covering textiles and footwear continued to be a matter of particular concern. In accordance with the terms of the Treaties of Accession, Britain, Denmark and Ireland aligned their schemes with that of the EEC from January 1, 1974. Consequently, Hong Kong, which previously enjoyed full Commonwealth preferences in Britain, was excluded from generalised preferences on textiles and footwear by these countries as well as by the other EEC members while important competitors of Hong Kong (South Korea and Singapore) qualified for the full benefits of the enlarged EEC's scheme.

In April a meeting was held in London between representatives of the British Government and the Hong Kong Government to discuss this problem. Following this, Mr Callaghan, Secretary of State for Foreign and Commonwealth Affairs, when speaking in the Council of Ministers of the EEC, on June 4, said that Britain would seek 'substantial improvement' in the position of Hong Kong 'where at present the United Kingdom has to discriminate against one of its territories'. On June 14, Hong Kong formally addressed a memorandum to the European Commission pressing for the removal of discrimination against Hong Kong's textiles and footwear in the Community's scheme. Hong Kong officials supported by British Embassy officials, then toured EEC capitals, making the same case separately to individual member states. Similar representations were made by the Director of Commerce and Industry to the consuls general of the member states in Hong Kong.

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