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CONFIDENTIAL
this would not affect the UK. X*X*X*XX In the spe- cifi cases of Taiwan and South Korea, we would view their inclusion by the EEC with equanimity on the assumption that Hong Kong also included in a manner satisfactory to that territory, ie, that she did not suffer substantially from discrimina- tion in favour of her close competitors. Assuming that Hong Kong will be granted satisfactory prefer- ential access by the other donors, the UK would see
no major difficulty in the inclusion of Taiwan and South Korea in the UK preference scheme.
Showed Hong Kong s
3. For your own information, our difficulty over them Taiwan and South Korea is that while Hong Kong would clearly like her rivals to be restricted in the EEC preference scheme to exactly the same extent as she is we do not wish to press this
upon the EEC. Themxnasanxnxmthanx If the UK seemed
to be responsible for EEC action against Taiwan and South Korea (though in fact the EEC would take such steps purely to placate their domestic industry) this might stimulate the USA to compensatory action at the expense of Hong Kong. This would be unfor- tunate, as the main Hong Kong interest in EEC pref-
Lias erences in using them as a stepping-stone to qualify for American preferences.
If the EEC.
should decide to limit Taiwan South Korea's participation in their preferences scheme, it should be clearly established that the reasons were purely economic, and in no way the result of pressure by
HMG.
at a considerclele disadvantage vis à vis There competitons however, we shred have to
A esamine the
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