Registry No.

SECURITY CLASSIFICATION

Top Secret.

Secret.

Confidential.

Restricted.

Unclassified.

PRIVACY MARKING

CONFIDENTIAL

DRAFT

Brier

Type 1 +

From

To:-

Telephone No. & Ext.

Department

274

A

..In Confidence

Nerim

Hong Kong and the UNCTAD Generalised Preferences Scheme

An aide-memoire on this subject was sent to the

State Department in May. The Embassy in Washington

reported in early September that two alternatives had

been submitted to the President either that

Hong Kong should be included subject to her inclusion

by the EFC and Japan or that she should be excluded

subject to revision if she is included by the EEC and

Japan.

2.

The Secretary of State might say that we attach

great importance to this matter, and very much hope

that Hong Kong will not be excluded from the U.S.

offer. We accept that Hong Kong is competitive in

some products but this problem can be overcome by the

use of safeguard arrangements. Other developing

countries, such as South Korea and Taiwan, are no

less competitive; Hong Kong merely seeks the

avoidance of discrimination.

A decision by the USA

to exclude Hong Kong would strongly encourage other

major donors to follow suit. This could have adverse

effects on Hong Kong's economy and consequently on

the future development and stability of the colony.

CONFIDENTIAL

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