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INDUSTRY AND TRADE

External Commercial Relations

Hong Kong possesses full autonomy in the conduct of its external commercial relations. The Governor is entrusted with executive authority to conduct external relations on behalf of Hong Kong, namely, to conclude and implement trade agreements, whether bilateral or multilateral, with states, regions and international organisations and to conduct all other aspects of external commercial relations.

Hong Kong is a contracting party to the General Agreement on Tariffs and Trade (GATT), the basic aim of which is to liberalise world trade and ensure the conduct of trade in a non-discriminatory and stable manner. The Hong Kong Government pursues a free trade policy, and the success of the policy is evidenced by the steady rise in the value and sophistication of Hong Kong's exports in recent years. Within the context of the free trade policy, Hong Kong's commercial relations are designed to ensure that Hong Kong's trad- ing rights in overseas markets are protected and its international obligations are fulfilled.

GATT is the cornerstone of Hong Kong's external trade relations, while the Multi- Fibre Arrangement (MFA), which aims at the orderly development and expansion of international trade in textiles, provides the framework within which Hong Kong negotiates bilateral restraint agreements with textile importing countries.

GATT

Given the externally-orientated and open nature of its economy, Hong Kong contributes - to, and relies on, the healthy functioning of the multilateral trading system. Hong Kong has, therefore, always been a staunch supporter of GATT and the free trade principle it espouses. Hong Kong participated in GATT activities for many years as a British dependent territory, before becoming a separate contracting party in 1986. This status, which underlines Hong Kong's autonomy in the conduct of its external commercial relations, will extend beyond 1997.

During the year, Hong Kong continued to participate actively and constructively in the extended Uruguay Round (UR) of multilateral trade negotiations which were finally concluded on December 15 -over seven years after the negotiations were launched in 1986. The package of Uruguay Round Agreements, known as the Final Act, covers a wide range of subjects. Apart from traditional subjects such as tariff reductions on goods, it also includes new areas such as trade in services, trade-related intellectual property rights and trade-related investment measures; a review of GATT disciplines; the creation of a new institution the World Trade Organisation to replace the existing GATT structure; and the phasing out of the Multi-Fibre Arrangement (MFA) which provides a legal basis for discriminatory quota restrictions in the area of textiles and clothing.

In overall terms, Hong Kong stands to gain from the successful conclusion of the Round which will strengthen and boost confidence in the most-favoured-nation-based multilateral trading system. It is intended that at a ministerial meeting to be held in April 1994 in Morocco, ministers of GATT UR participants will sign and authenticate the UR agreement and agree on certain implementation details.

Hong Kong continued to work closely with other exporters of textiles and clothing in the International Textiles and Clothing Bureau to press for the integration of the textiles sector into the GATT. Hong Kong has played a pivotal role in forging a consensus on the recent short extension of the MFA, aimed at bridging the gap between the expiry of the MFA and the implementation of a UR agreement.