FINANCIAL Secretary Hamish Macleod warned yesterday that the key principles of the General Agreements on Tariffs and Trade (GATT) may be compromised in deal-cutting between the organisation's major members in the run-up to the talks deadline on December 15. ''One of our greatest concerns, as the round reaches its finale, is that last-minute deal-cutting may compromise key GATT principles,'' he said. While differences over difficult issues had been narrowed, they had yet to be resolved. It was in the nature of trade negotiations that such issues were not resolved until the last possible moment, Mr Macleod said. ''But there is always the danger that when the final positions of key players are revealed, gaps still remain,'' he said. On the anti-dumping issue, Mr Macleod said protectionists were advocating further changes to the GATT anti-dumping code and that they were gathered in force in Geneva. ''I am very concerned that we will miss a vital opportunity to restrict anti-dumping to its rightful place as a trade policy instrument of last resort, to be used only where genuine dumping is taking place and not as a weapon to harass normal trade.'' Mr Macleod said Hong Kong, as an open market, was a most unlikely source of dumped goods. However, the arcane complexity of the dumping rules and regulations in some of the territory's major markets did not stop the territory's manufacturers from being targeted. ''The rules are unfortunately open to abuse. Cases can drag on for years and even if we win, exports meanwhile have been cut back,'' he said. On the the Multi-Fibre Arrangement (MFA) which governs textiles and garment quota, Mr Macleod said that if the MFA was phased out, Hong Kong's textiles and garment industry would undergo substantial restructuring. ''It will mean that in 10 years or so, only highly productive, cost-efficient operations can survive in Hong Kong. Others will go elsewhere,'' he said. ''We are prepared to accept that challenge.'' At the same time, he said that there was no doubt that the MFA would be extended before its expiry at the end of this year. However, Mr Macleod expressed doubts that the target of one-third reduction in tariffs would be achieved in the current negotiations. The reluctance among some developed economies to make significant reductions in textiles and clothing tariffs had been disappointing for Hong Kong, he said, adding that those tariffs were likely to remain much higher than average tariff levels. ''Nevertheless, we may see Hong Kong-made products attracting fewer tariffs next year,'' he said. ''Our competitors will gain similarly but lower tariffs should mean lower retail costs and higher consumption overall.'' He also called for the multilateral rules and disciplines to be extended to cover trade in services. He said that many of the offers made in the service negotiations so far represented little more than a commitment not to raise new barriers. ''But the new system will provide greater transparency and a means to bring pressure on governments to lower barriers to service trade,'' he said. adding that the benefits would be gradual and that many barriers to trade in services would remain at first.