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iii)
that the grant of preferences should not impede further tariff reductions on an m.f.n. basis.
These conditions are still valid.
21.
It
QUESTION
and they
DEFINING DEVEDPING
It should be stressed in particular that the word "generalised" has always meant for us "applicable to all develop countries". The Special 0.E.C.D. Group wrestled for months with alternative possible methods of defining which courtriese developing and which are not. proved impossible to find economic criteria which were likely to gain general international acceptance; therefore recommended that preferences should be extended to all countries claiming developing status (with a loop- hole to enable the Americans to refuse to give preferences to Cuba). The developing countries themselves advocate that preferences should be extended to members of the Group of 77. This arbitrary method, another form of the self election principle, has nothing to commend it. Although 0.E.C.D. Ministers broadly endorsed the O.E.C.D. report, there can be little doubt, when it comes to the crunch, that by one means or another most prospective donor countries will wish to exclude some possible claimants to developing status, especially Hong Kong.
22. It is, of course, strongly in our interest that Hong Kong should not be excluded. We are already giving duty free entry to virtually all Hong Kong's exports and it would suit us very well to have other developed countries granting preferences for the first time to Hong Kong's exports.
23. We are probably faced with a defensive battle on Hong Kong's behalf. We should do our best in the months to come to press Hong Kong's case for inclusion in any preferential arrangements by standing on the principle of non discrimination between claimants to developing status. The Hong Kong Government are anxious not so much to get new preferences as to avoid a situation in which Hong Kong exports are faced with discrimination for the first time vis a vis the exports of other competing developing countries.
24. We have never opposed, outright, EEC proposals for duty quotas. As we would not wish to grant preferences to developing countries unilaterally, and we have no means of forcing other countries to adopt arrangements to which they are opposed, the right policy seemed and still seems to be to get the most generous offers possible out of our fellow developed countries and then to cut down, if necessary, our own offers in accordance with the agreed burden sharing principle. Although we would not want to be faced with the necessity for introducing duty quotas over a wide range of developing country trade, we could probably operate a limited number of such quotas if the EEC and others insisted on limiting preferential imports by this particular device. Moreover, if the duty quota technique were adopted, it could prove a useful safeguarding mechanism for us in case of need.
HONG
RONG.
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