ENG-1996 — Page 147

TRADE AND INDUSTRY

Non-textiles Issues

The European Commission (EC) initiated anti-circumvention investigations into 3.5- inch microdisks originating from Hong Kong in October 1995. Hong Kong raised objections to the initiation and engaged the EC in consultations. The EC's investigation, conducted in Hong Kong in January 1996, could not establish evidence of circumvention. In July, the EC terminated the case.

With the coming into effect of the General Agreement on Trade in Services (GATS) when the WTO was established in January 1995, global trade in services is now governed by a legally enforceable multilateral agreement. Hong Kong plays an active role in the WTO forum to ensure the proper functioning of the GATS and progressive liberalisation of trade in services.

During the first half of the year, the Hong Kong Government and the private sector continued to emphasise to the administration and members of Congress the adverse effects on Hong Kong's economy if the USA were to withdraw China's Most Favoured Nation (MFN) trading status, or to impose conditions on the renewal of the status. On May 31, President Clinton announced his decision to renew China's MFN trading status unconditionally for another year. A joint resolution dis- approving the President's decision on MFN was introduced but was defeated by a floor vote in the House of Representatives on June 27.

The outcome removed uncertainty over Sino-USA trade relations, and allowed Hong Kong businessmen to plan and conduct their operations accordingly. China and the USA are Hong Kong's two largest trading partners and good relations between them are of vital importance to the territory as a trading, financial and investment centre.

Trade Department

The Trade Department is responsible for Hong Kong's commercial relations with foreign governments. It implements trade policy and agreements, and conducts import and export licensing and origin certification.

The department consists of five divisions. The Multilateral Division deals with the multilateral aspects of Hong Kong's external commercial relations, such as its participation in the World Trade Organisation (WTO). The Regional Co-operation Division takes care of activities related to the Asia-Pacific Economic Co-operation forum (APEC), the Pacific Economic Co-operation Council (PECC) and commercial relations with Asia, Australia and New Zealand.

The Americas Division and the Europe, Africa and Middle East Division deal with bilateral commercial relations with Hong Kong's trading partners in their respective geographical areas. Such work includes the conduct of trade negotiations and the implementation of textiles agreements, as well as the collection and dissemination of information on developments which may affect Hong Kong's external trade, especially those relating to trade policies and measures adopted in its major markets. The Americas Division has, in addition, responsibility for trade-related discussions in the Organisation of Economic Co-operation and Development (OECD), while the Europe, Africa and Middle East Division is also responsible for multilateral anti- dumping, origin certification and rules of origin matters.

The fifth division is the Systems Division, which is responsible for the textiles export control system, the Textiles Trader Registration Scheme, non-restrained textile

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