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Hong Kong:Textile firms alerted on ‘country of origin’

2004-9-29


Textile manufacturers have been encouraged to apply for country of origin (CO) documentation for their exports when import quotas expire on January 1 to avoid them being mistaken as goods made in China, the Trade and Industry Department said.

Charmaine Lee, department''s Assistant Director-General said proposals will be put forward to the new legislature for consideration in October to prepare for the new global textile trade regime next year.

Addressing local textile manufacturers on Monday Lee said that the proposals are aimed at easing their documentation burden, saving administrative costs and increasing their competitiveness. She estimated the new measures will save each local manufacturer about HK$40,000 in administrative expenses annually.

Members of the World Trade Organisation (WTO) have agreed to abolish a longstanding practice of import restrictions on textiles when the four-decade old multifibre agreement that has regulated the US$350 billion (HK$2.73 trillion) global garment trade expires next year. This is expected to greatly benefit China, which has long been slapped with import quotas.

Currently, Hong Kong textile manufacturers are required to show CO documentation to members of the European Union but are exempted from doing so to the United States.

Lee said these countries have not formally confirmed to the Hong Kong government their position on these matters under the new regime next year.

“Under the WTO framework if the US requires Hong Kong exporters to produce CO documentation, they have to extend the same demand to all countries exporting them,'''' Lee said.

Nevertheless, she said the ability to offer CO documentation has its advantages if foreign customs have doubts whether the garments originated from Hong Kong or the mainland. This is especially important as US textile and apparel industry groups have put pressure on Washington to introduce special limits on mainland textile imports.

In negotiating China''s entry into the WTO in 2001, Beijing agreed to allow the US and other WTO members to restrict textile and apparel imports from China in response to market-disrupting increases until 2008. These countries can also apply restrictions to all Chinese exports, including textiles, until 2013.

As per Lee, the former textile-specific measures are easier to impose than the latter country-specific measures.
 
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