ENG-1983 — Page 47

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INDUSTRY AND TRADE

textiles ($7,822 million), electrical machinery, apparatus and appliances ($4,931 million), clothing ($4,495 million), photographic apparatus, equipment, supplies and optical goods, watches and clocks ($4,258 million). The main countries of origin of these re-exports were China, Japan, the United States and Taiwan. The largest re-export markets were China, the United States, Singapore and Indonesia.

International Commercial Relations

Hong Kong's external commercial relations are conducted by the Trade Department within the framework of a basically free trade policy. Hong Kong practises, to the full, the rules of the General Agreement on Tariffs and Trade (GATT). Virtually the only restrictions maintained on trade are those required by international obligations. Most prominent among these are restraints on textile exports to major trading partners in Europe and North America. All these restraint arrangements were negotiated under the Arrangement Regarding International Trade in Textiles, commonly known as the Multi-Fibre Arrange- ment (MFA). A feature of the MFA is the Textile Surveillance Body (TSB) which supervises its implementation. A Hong Kong representative sat on the TSB as a full member in 1983.

Co-ordination with other developing exporting members of the MFA remained an important activity for Hong Kong in 1983. Members continued to exchange views and information on issues relating to trade in textiles and clothing, particularly on the study being carried out in the GATT following the decision adopted in the GATT ministerial meeting of November 1982. They also discussed the format of future co-ordination among them. Hong Kong participated fully in these exchanges.

Hong Kong's exports of cotton, man-made fibre and wool textiles to the United States are subject to the provisions of a bilateral agreement covering the period 1982-7. Under the terms of the agreement, exports in 24 categories of textile products are subject to specific restraint limits while exports in all other categories are subject to an export authorisation (EA) surveillance system. Under the EA system, the United States may seek consultations with Hong Kong with a view to reaching agreement on an appropriate level of restraint in any one year where it considers that its imports from Hong Kong in any particular category are disrupting its market. During 1983, consultations were held and limits set for the year in response to the United States' requests on 13 EA categories.

The new bilateral textiles agreement between Hong Kong and the European Economic Community (EEC), concluded at the end of 1982, has a duration of four years from January 1983 and covers virtually all Hong Kong's exports of cotton, man-made fibre and wool textiles to the EEC. Exports in 44 categories of textile products are subject to specific limits in respect of all regions of the EEC. A further six categories are subject to limits in respect of certain regions, and the remaining categories are subject to EA surveillance. Consultations were held in June 1983 under the terms of the agreement to determine the amount of advance use of 1984 quotas (carryforward) available to Hong Kong during 1983. In almost all cases, Hong Kong was able to obtain a higher percentage than the minimum one per cent carryforward provided for in the agreement.

A bilateral agreement between Hong Kong and Canada covering the period 1982-6 provides for specific restraint on 16 textile categories and EA surveillance on 10 other categories. Consultations under the terms of the agreement were held in June, as a result of which a limit was agreed on exports of denim fabric to Canada in 1983. In further consultations held in August, Hong Kong rejected a Canadian request to modify the terms of the agreement in certain respects.