ENG-1984 — Page 106

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INDUSTRY AND TRADE

Reagan on December 16, 1983, the United States made an unprecedented number of requests for restraint of exports. Second, on August 3, the United States Government published interim regulations governing the entry of textiles from all sources.

The United States/Hong Kong Textiles Agreement (1982-1987) imposes specific quanti- tative limits on 39 categories of textile products. It also subjects all other categories to an export authorisation (EA) system. Under the EA system, the United States may seek consultations with Hong Kong with a view to establishing an appropriate level of restraint where it considers that imports from Hong Kong in respect of a particular category are causing disruption to the domestic market. After the December 1983 presidential announcement, the United States made 16 calls on Hong Kong, and consultations were held on all of them. Most of these calls resulted in limits being imposed (five) or agreed (eight), but three calls were withdrawn and consultations on seven calls were inconclusive.

Under the interim regulations published on August 3, the United States unilaterally assumes the authority to determine the origin of textile imports. The regulations also introduced substantial additional documentation requirements which require the disclosure of commercially confidential information. Exporters no longer have certainty that goods properly licensed under the bilateral agreement will be granted entry into the United States on arrival. The documentation requirements affect all Hong Kong's MFA textiles exports to the United States. The new origin requirements threaten one-seventh of all exports of MFA products to the United States. In Hong Kong's view, the new regulations violate the MFA and the bilateral agreement and should be rescinded. The interim regulations were to be reviewed in late 1984.

During GATT Council and GATT Textiles Committee meetings in September and October, the impact of these new regulations was discussed. The meetings reflected the opposition to the regulations stated by all delegations, and particularly reflected the view that the regulations should be withdrawn or at least postponed pending a full review.

Co-ordination with other developing exporting members less developed countries (LDCs) – of the MFA remained an important activity. The year saw the opening for acceptance of an arrangement establishing the International Textiles and Clothing Bureau which aims at advancing LDC interests in international textiles trade. Hong Kong has accepted the arrangement.

Non-Textiles Issues

French quantitative restrictions: France has been maintaining unilateral quantitative restrictions against imports of eight products from Hong Kong, including quartz watches. After numerous rounds of inconclusive consultations with France and the EEC Commis- sion, Hong Kong referred its complaint to the GATT in August 1982 for a ruling. The GATT ruled in July 1983 that the restrictions maintained by France were without justification and recommended their termination.

Following the GATT's ruling, France lifted the restrictions on three products and increased the 1984 quotas for two. As for quartz watches, the EEC Commission, following internal procedures, decided to invoke Article XIX of the GATT authorising France to impose a temporary import quota on digital quartz watches. The global quota is for three years from April 20, 1984. As a major supplier, Hong Kong entered into consultations in September 1984 with the EEC Commission regarding the protective measure.

Generalised Schemes of Preferences (GSP): GSP are operated by most developed countries to promote the exports of goods from developing countries and territories by providing duty-free or reduced import tariff treatment. Except for Finland, all developed