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CONFIDENTIAL
Mr. Combs
Generalised Preferences and liong Kong
We have had a series of reports since December last year
that the European Community were likely to exclude Hong Kong
from the countries to which their offer of generalised
preferences would apply. The position seems to be that the
Germans and Dutch are in favour of Hong Kong's inclusion, the
Belgians and the French are against and the Italians are
ambivalent. The Community officials are well aware of the
political difficulties which Hong Kong's exclusion would create
for the U.K. and have had a series of discussions, not only with
our Delegation in Brussels, but also with Mr. Goldmith in which
ways of alleviating the position for Hong Kong were discussed,
though without commitment.
2. The advice we have received from our Delegation in Brussels
has been strongly to the effect that it would be most undesirable
to wait until the Communityposition were settled, since
experience showed that when a concensus was reached amongst the
conflicting interests of the member states, it was almost
impossibletto obtain any changes.
Mr. Hannay from Brussels
therefore advised that diplomatic representations should be
considered. I supported this line in my letter to Mr.Kemmis of
the Board of Trade at 18 on MUT 15/1, Part A and have pressed
the matter with him in subsequent conversations. These, however,
were basically unsatisfactory, since Mr. Kemmis appeared to be
under instructions from Mr. Goldsmith that this matter should be
dealt with through Mr. Goldsmith's own contacts and not at the
diplomatic level
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CONFIDENTIAL