:
Reference.....r. Slewart
Mr. Britten,
Trade Policy Department
119)
(112
τας
112
116
Generalised Preferences:
Hong Kong
Position of
I have delayed replying to your minute of 22 September in order to consider the exchange of letters dated 22 and 24 September between Mr. Jones 3(Geneva) and Mr. Goldsmith, copies of which are now in your possession. I have also seen Mr. Kemmis' minute of 1 October to Mr. Goldsmith reporting on recent discussions in Paris.
2.
Mr. Jones' letter contains the only recent thinking about Hong Kong's position that I have seen (paragraph 3 of your minute); but this is related only to the proposed special treatment of Hong Kong by EEC and cannot perhaps be said to represent the Hong Kong Government's considered views (although I judge that it must be in line with those views).
3. The alternative proposal advanced tentatively to Mr. Tran of EEC by Mr. Jones (paragraph 6 of the enclosure to his letter) appears to be an amalgam of (c) and (d) of Hong Kong's preferred fall-back positions as set out in paragraph 12 of your submission of 4 September. It is an attempt at a compromise which would avoid Hong Kong being singled out for special treatment "as a country".
This is
a position, as you know, that Hong Kong wants to avoid at all costs, for fear of compromising its status as a developing country (this status is important in other contexts e.g. Asian Development Bank). I do not think there would be any dissent, by Mr. Jones or in Hong Kong, from the observation in paragraph 5 of Mr. Goldsmith's letter that it is not realistic to suppose, whatever we do, that the EEC will agree to treat Hong Kong in precisely the same way as other beneficiaries and the real question is how much can be salvaged" The same observation could be applied, in my opinion, to other donor countries who are minded to discriminate against
* Hong Kong. Against this background I am quite sure
that Hong Kong sees its interests as best served by looking for a compromise which will avoid the ultimate "calamity" of being singled out country-wise for exclusion or other discriminatory treatment.
4. On the other hand our own interests might be seen as better served by pressing a l'outrance for general acceptance of self-election in an undiluted form. If Hong Kong's trade with European and the American markets were to be severely restricted as a result of discriminatory treatment, there could be a very real danger of deflection of Hong Kong's trade towards the UK. But if one reads the signs from Geneva and Paris aright there does seem little prospect (in spite of the satisfactory formal position at the moment) that it will be practicable to press for the application to Hong Kong of the principle of self-election in pure and undiluted form. Approaches such as those Mr. Jones has already made to EEC, however informal and tentative, must already be prejudicing such a stand, And if we stand
/ uncompromisingly ..