ENG-1988 — Page 106

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INDUSTRY AND TRADE

The United States Textiles and Apparel Trade Act introduced into Congress in 1987 continued to pose a serious threat to Hong Kong and world trade in textiles. The bill contained provisions to limit imports of textiles into the US from all sources to 1987 import levels with one per cent annual growth and would have caused considerable uncertainty and disruption to international trade in textiles and garments. The Bill passed by both Houses of Congress was vetoed by President Reagan on September 28, 1988. A vote by the House of Representatives on October 4 failed to override the President's veto.

Non-textiles Issues

Most trading nations adopted the Harmonised System as from January 1, 1988 which involved tariff changes for some of the products imported from Hong Kong. Bilateral consultations were held with Hong Kong's major trading partners to ensure that Hong Kong would not have to pay higher tariffs.

The United States Government announced on January 29 its decision to remove Hong Kong, South Korea, Singapore and Taiwan from the list of countries eligible for duty free treatment under the US Generalised System of Preferences as from January 2, 1989. The action was taken after an examination of a broad range of economic indicators relating to the development and competitiveness of the territories affected. About 16 per cent of Hong Kong's exports to the United States benefited from the tariff preferences provided under the scheme. The move caused disappointment in the Hong Kong business community but it was generally felt that its effects would not be very damaging.

In June, Hong Kong made a detailed submission to the EEC Commission on the EEC's 1989 GSP Scheme. Despite Hong Kong's representations, the EEC decided to exclude 32 Hong Kong products from GSP benefits in 1989.

In response to public concern in the United States about the large trade deficit the US Congress expressed its determination to pass legislation which would tackle unfair trading practices. Early drafts of a generic trade bill contained protectionist provisions which would have been very damaging to the multilateral trading system. In April, Senate and House representatives agreed on a compromise version of the bill in which the more protectionist clauses had been removed or modified. The new legislation, under the title: 'The Omnibus Trade and Competitiveness Act of 1988' was signed into law by President Reagan on August 23, 1988. Passage of the bill should help to reduce protectionist pressure in the United States.

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Documentation of Imports and Exports

As a free port, Hong Kong keeps its import and export licensing requirements to a minimum. Products over a wide range do not need licences to enter or leave Hong Kong. Where licences are required, they are intended to achieve two main objectives. Firstly, they help Hong Kong to fulfil its international obligations to restrain exports of textiles products and, related to this, to monitor the flow of these products into Hong Kong. Thus there is a requirement for all imports and exports of such products to be covered by licences issued by the Director of Trade. Secondly, they help Hong Kong to control, on health or safety grounds, exports and imports of a few types of non-textile products such as strategic commodities, pharmaceuticals and agricultural pesticides.

There is in Hong Kong a certification of origin system to establish the origin of the goods which Hong Kong exports and to meet the requirements of the importing authorities. The Trade Department administers and safeguards the integrity of this system, and issues certificates of origin where required. Other government-approved certificate-issuing