Mr. Britten
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Generalised Preferences
Position of Hong Kong
As we discussed on the telephone, it would be useful if we could have a meeting with Mr. Goldsmith in the Board of Trade to talk about the position of Hong Kong in relation to the generalised preference scheme. Reflecting on the discussions which took place at ast Friday's meeting of P.C.0., the following seem to be some of points which we would wish to probe or examine.
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How firmly has the principle of "self-election" been accepted in the UNCTAD discussions?
We would presumably not be prepared to carry our support for Hong Kong to the point of jeopardising progress on the scheme of generalised preferences or of causing it to be seriously watered down by exclusion of products.
How serious would the effect be on Hong Kong exports of a scheme where we generalised preferences on certain products in which Hong Kong was interested without their receiving compensating preferences in the E.E.C. or other markets? This would hinge of course on the depth of the tariff cuts which we gave to non-Commonwealth developing countries but I suppose that countries like Taiwan and South Korea would sell more in this market. I can't help thinking, however, that a more likely effect is that some of the Hong Kong trade at present going to the continent would be diverted to the U.K. market.
How seriously would Hong Kong trade be affected in the E.E.C. and other markets if they were excluded from the generalised preferences on the assumption that these took the form of a duty-free quota?
What chances would there be of the .E.C. taking a more tolerant view of Hong Kong in return for acceptance of a limit on any duty-free quota which could be taken by Hong Kong. At present I think the proposed arrangement is not more
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