THE free trade debate battles on in the United States, Western Europe and Southeast Asia, but the differences over APEC that emerged in Bali, and the stalemate in the Uruguay Round of GATT talks suggests that international trade liberalisation is now a remote possibility.
This is bad news for Hong Kong. The formation of rigid trading blocs would damage global free trade and hamper the economic development of Hong Kong in the long run.
The three key trade groupings (APEC, NAFTA and the EC) currently in operation cover a substantial portion of the world's trading arena.
Hong Kong is of course a member of APEC grouping, which covers a large catchment area with a population of about 1.9 billion people and a 35 per cent share of total world trade, worth about US$2.3 trillion.
As far as GATT and the Uruguay Round are concerned, Hong Kong has more to gain from a successful completion of the talks than from involvement in a large regional trading bloc.
In 1992 alone Hong Kong's total exports were worth $229 billion with North America, $170 billion with Western Europe, and $450 billion with Asia. Total imports were $740 billion from Asia, $109 billion from Western Europe, and $74 billion from North America. There was a visible trade deficit of $30 billion in 1992.
Hong Kong's clothing and textile industries are the ones which will benefit the most from an agreement under GATT. GATT's objective is the removal of all non-tariff barriers to trade, and under the Multifibre Arrangement, textile and clothing exports aresubject to quotas and not tariffs.
