ENG-1997 — Page 147

TRADE AND INDUSTRY

Within the context of the government's free trade policy, the objectives of the HKSAR's commercial relations are to ensure that its trading rights in overseas markets are protected and its international obligations are fulfilled. Hong Kong's success is reflected in the steady rise in the value and sophistication of its exports in recent years.

Textiles

The HKSAR textile exports to the European Union (EU), Norway, Canada and the USA are subject to quantitative restrictions maintained under the WTO Agreement on Textiles and Clothing (ATC) which came into force on January 1, 1995. These quantitative restrictions will be removed by 2005 under a 10-year phase-out programme. The HKSAR participated actively in the review of the implementation of the quota phase-out programme and continued to monitor closely the functioning of the ATC's supervisory body, the Textiles Monitoring Body. Through the co- ordination of the International Textiles and Clothing Bureau (of which the HKSAR is a member), the HKSAR and a group of developing country exporters of textiles work together to ensure that the liberalisation process under the ATC is on course, and to explore possibilities for further liberalisation.

In May 1997, the US rescinded the single entry bond which, among other additional documentation requirements, was imposed by the US Customs in June 1996 on imports of 10 categories of the HKSAR garments. The revocation decision signalled the USA's recognition of Hong Kong's determination and efforts in tackling illegal textile transshipment.

Non-textiles Issues

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. The HKSAR 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 year, the HKSAR provided constructive input to the multilateral negotiations on basic telecommunications and financial services. The negotiations on basic telecommunications were successfully concluded on

February 15, 1997. The agreement will open up a h huge telecommunications market globally, estimated at US$760 billion per annum. The commitments will come into effect on February 5, 1998. The financial services negotiations were successfully concluded on December 13, 1997. The agreement comprises a broad range of commitments to open up financial markets which account for over 95 per cent of the world trade in financial services. These commitments are scheduled to come into effect on March 1, 1999.

Hong Kong joined the Information Technology Agreement concluded in March 1997 under which participating economies undertook to eliminate tariffs on information technology products, components and sub-assemblies by January 2000. It is estimated that more than $170 billion of Hong Kong's domestic exports and re- exports will benefit.

In May 1997, Hong Kong acceded to the WTO Agreement on Government Procurement under which each party is required to provide non-discriminatory treatment to the products, services and suppliers of other parties. Hong Kong's accession to the agreement re-affirms the continuity of its open, transparent and non-

99