OVA/10/8/1
CONFIDENTIAL
14uii
26 March
9
UNCTAD Preferences
As I see from your letter to Hannay of 21 March that you hope to be seeing Tran in the course of this week I am writing this with a few more questions in case you feel yourself in a position to put them to him. Unfortunately, as the copy of your letter only arrived on my desk this morning and there is no bag until tomorrow afternoon,
it may be that this will arrive too late; in which case you might still find it useful in case either yourself or Owen Kemmnis soe Tran again.
2.
I fully agree with the point made in your letter about Tran's 4 hypotheses and I made it myself in a letter I wrote to Dorward in Hong Kong (paragraph 5.(b) of enclosed). The other points I have are as follows:-
(1) We have always been somewhat unclear about what the Community are including as sensitive and semi-sensitive products.
For instance, we have had a sensitive list and a "Hong Kong" sensitive list which only coincides with the former in about two or three products.
I have seen nothing as yet on semi-sensitive products. Furthermore, an analysis of the Hong Kong sensitive list shows that it contains hardly anything of real importance in trade; Tran's latest list of imports from Hong Kong in 1966 shows that clothing alone accounted for well over half of the total (888 million out of $15 million) and yet MMP and woollen clothing have not appeared on either of the sensitive lists I have seen so far. In other words, what we want is for Tran to give us as definitive lists as possible on sensitive and semi-sensitive products
that we can get down to case
(11) fe say that anything less than 20% of a quota would be pretty derisory; but in the case of some products, especially semi-sensitive, might not percentage higher than 20 within a range up to 50% as for other developing countries not be permitted?
(iii) Whatever provisions were adopted to limit Hong Kong's share in certain quotas we would probably prefer, for administrative reasons, to have this limitation imposed by the Community on a cut-off basis. It would really be rather difficult to administer a preference quota system from Hong Kong on a large number of items as internal politics would probably require the allocation system to be over-complicated.
(iv) It may well be that for some products Hong Kong would prefer to be excluded from preference altogether rather than to be given only
R. Goldsmith, Esq.,
Beard of Trade,
1, Victoria 8t., 8.W.1.
CONFIDENTIAL
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