ENG-1977 — Page 46

INDUSTRY AND TRADE

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under the umbrella of the Arrangement Regarding International Trade in Textiles, commonly known as the Multi-Fibre Arrangement (MFA). A feature of the MFA is the Textiles Surveillance Body (TSB), which supervises the implementation of the arrangement. A Hong Kong representative sat on the TSB as a full member in 1977. The MFA, to which Britain acceded on behalf of Hong Kong in 1974, expired on December 31, 1977. Long and intense discussions took place during late 1976 and 1977 in Geneva under the auspices of GATT to determine its future. As a result, it was agreed in mid-December, 1977, that the MFA should be extended for four years from January 1, 1978.

As a result of negotiations under the MFA, bilateral agreements were concluded during the year with Austria, Finland, Norway, Sweden, the European Economic Community and the United States. Under the terms of the agreements, exports of certain textiles from Hong Kong to these countries were placed under restraint.

The bilateral agreement between Hong Kong and the European Economic Com- munity, under which the bulk of Hong Kong's textiles and clothing exports to the EEC were subject to restraint, expired on December 31, 1977. Following negotiations under the MFA, a new and comprehensive bilateral agreement was concluded for five years from January 1, 1978.

At the conclusion of the negotiations, the Acting Governor said the outcome had been accepted 'reluctantly and with many misgivings.' He characterised certain aspects on which the EEC had insisted as manifestly unjust.

A new bilateral agreement with the United States has a duration of five years from January, 1978, and covers all of Hong Kong's exports of cotton, man-made fibre and wool textiles to the United States. The existing bilateral agreement with the United States, which was to have expired on September 30, 1977, was extended to December 31 with proportionate adjustments in the restraint limits.

In November, 1976, Canada unilaterally announced that export restraints on several clothing items, which formed the subject of two bilateral agreements concluded in August and October, 1976, would be superseded by global import restrictions. These global restrictions, which covered a wide range of clothing items, remained in force throughout 1977.

A seminar on international trade in textiles with particular reference to the MFA was held in Hong Kong in May, 1977. It was organised by the Commonwealth Secretariat with the co-operation of the United Nations Economic and Social Com- mission for Asia and the Pacific (ESCAP), the United Nations Conference on Trade and Development (UNCTAD) and the General Agreement on Tariffs and Trade (GATT), and was attended by more than 30 delegates from Commonwealth and ESCAP developing countries and territories. The seminar was designed to provide participants with an opportunity of exchanging views and identifying common in- terests and problems.

Work went on during 1977 on the Multilateral Trade Negotiations, which were launched in September, 1973, in Tokyo with the object of further liberalising world trade by removing or reducing tariff and non-tariff barriers. Again, little progress was made for the greater part of the year. In the last quarter, however, there was a significant acceleration in the pace of the negotiations, which are still continuing.