ENG-1999 — Page 148

TRADE AND INDUSTRY

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may, using the name 'Hong Kong, China', participate in relevant international organisations and international trade agreements, such as the General Agreement on Tariffs and Trade (now the World Trade Organisation — WTO).

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Within the context of the Government's free trade policy, the HKSAR's commercial relations aim to ensure that its trading rights in overseas markets are safeguarded and its international obligations are fulfilled. Hong Kong's success is reflected in the volume of its total trade, its global ranking as a trading entity and sophistication of its exports in recent years.

Textiles

The HKSAR textiles exports to the European Union (EU), Canada and the USA were subject to certain quantitative restrictions maintained under the WTO Agreement on Textiles and Clothing (ATC) as at January 1, 1995, when it came into force. The ATC provides for phasing out of quantitative restrictions on these products in 10 years by three stages commencing on January 1, 1995, January 1, 1998, and January 1, 2002, respectively. The HKSAR continues to monitor closely the implementation of the ATC and the functioning of the Textiles Monitoring Body, the ATC's supervisory body. Through the co-ordination of the International Textiles and Clothing Bureau (of which Hong Kong, China was elected as Chairman on December 15, 1998), 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.

The HKSAR continued to co-operate with relevant trading partners with a view to enhancing the effectiveness of efforts against illegal textiles transshipment. This co- operation included, among other things, the conduct of joint factory observation visits by Hong Kong Customs officers in conjunction with US Customs representatives. The visits, while not in themselves acts of law enforcement, help promote understanding of the anti-transshipment efforts by Hong Kong. In 1999, two rounds of joint factory observation visits were conducted.

Non-Textiles Issues

With the coming into effect of the General Agreement on Trade in Services (GATS) when the WTO was established on January 1, 1995, international trade in services is now governed by a legally enforceable multilateral agreement. The HKSAR plays an active role in the WTO to ensure the proper functioning of the GATS and progressive liberalisation of trade in services. During the year, the HKSAR continued to monitor closely the implementation of the multilateral agreements on basic telecommunications and financial services.

The agreement on basic telecommunications, which came into effect on February 5, 1998, opens up a huge telecommunications market globally, estimated at US$760 billion per annum. The commitments made pursuant to the financial services negotiations concluded on December 13, 1997, came into effect on March 1. These commitments will open up financial markets which account for over 95 per cent of the world trade in financial services.

The GATS mandates that there shall be successive rounds of services negotiations, with a view to achieving a progressively higher level of liberalisation in trade in services. The first round of comprehensive services negotiations will be launched in