3
5.
The direct loss of exports that would result from
Hong Kong's exclusion by the E.E.C. (which would inevitably follow exclusion by the U.S.) is also difficult to predict with any precision. But it seems likely that something like $100 million of Hong Kong's exports to the E.E.C. would be imperilled by the
The granting of preferences to Hong Kong's closest compotiters. most important of Hong Kong's exports to the E.L.C. which would meet the origin criteria for preferences (including textiles and footwear as these are included in the E.E.C. offer) are:
Proportion
meeting
Total exports
to L.1.C.
(1969)
Toys
Product
Torches, lanterns, etc. Other electrical
appliances
Travel goods
Clothing
Footwear
Wigs
Vabrellaa
Made-up textiles
Cotton fabrics
Artificial flowers
origin criterion
$ Million
A11
15
Most
3
Nost
3
Most
2
Somo
107
Some
10
Some
9
Somo
3
Somo
2
Some
Some
2
3.
E.E.C. Tariffs
7 to 1% 10 to 15%
54 to 20%
to 15%
13 to 19% 10 to 20%%%
10% 16
9 to 21%
10 to 15% 15 to 19%
All of the above are products in which competition from other developing countries is already gaining ground rapidly, and the effect on ilong Kong's exports of tariff discrimination ranging up to 20% could not fail to be disastrous.
6.
The total offect of tariff discrimination against llong Kong by the U.š., the E.E.C. and (as could be expected to follow) nost of her other devoloped customers would in all probability be an export loss of several hundred million dollars.
There is no conceivable way in which Hong Kong, which already runs a heavy unfavourable balance of trade, could make this
up.
So a scheme evolved by the richer countries to benefit the poorer threatens to bring economic and social disaster to Hong Kong.
BRITISH QIDASSY, WASHINGTON, D.C.
29 September, 1970.