0VA/10/8/1.
30 October
170
Following our meeting last week I have prepared the following note setting out the arguments I put forward to you then that it would be in Europe's overall advantage to include Hong Kong in the Generalisedg Bystem of Preferences provided that the United States also does so.
2. I am afraid that the pressure of other work since then has prevented me from completing this as early as I would have liked to, but I still hope it will be useful to you. You will see that I have called it "Further Note on Hong Kong" because it is really a follow- up to the paper "Aperqu sur Hong-Kông" which you prepared some time ago from material I supplied to you. It is, of course, a private paper prepared on my own initiative and responsibility but you may nevertheless, wish to have it translated into French and circulated to these most concerned.
3. I should point out here that there is just one point where, in writing the paper, I did not fully follow your advics. This concerns what you call "autolimitation" of claims to preference. I can confirm in this letter that, from a technical point of view, it would be possible for the Hong Kong Government, not without some difficulty, to operate a system of preference certificates up to an agreed limit. It would then be a simple matter to collect and add up these certificates at the receiving end.
However, I must repeat that this is not some thing we would be at all anxious to do, mainly because it would be a means of discriminating against Hong Kong and in favour of her competitors. I think I have shown in the paper that the growing competitive power of, notably, Taivan and South Korea is not a chimera we have made up to produce a case, but is rather a reality which cannot be wished away. This competition is, for obvious reasons, now largely concentrated on the American market and to a lesser extent in Japan. But such is the rate of growth of exports from these countries that Europe will not be exempted for very long. Por Europe an industries to argue that Hong Kong is the only threat is out of date and the reverse of the truth. The true facts of the situation are that, as time goes on, Hong Kong is becoming less of a threat because of the general rise in
/her
M. Tran V.T..
Commission des Communautés Européennes,
Berlaymont L4/76,
200 Rue de la Loi,
Bruxelles,
Belgique.