Committee meeting on 16 July. An acute problem in this sector
is the position of Hong Kong, which now faces the threat of
exclusion from the preference offers of several major donors at
a time when it has to withstand growing competition from lower
cost economies like those of South Korea and Taiwan.
In addition to general arguments as to the desirability
of including Hong Kong in the generalised preference scheme, the
following points relating particularly to the current situation of
the United Kingdom as an applicant for membership of the
European Communities are of real importance; and Her Majesty's
Government would hope that the Commission and Member States of
the European Communities would give them the fullest consideration
before coming to any decision as to the European Communities'
attitude on beneficiaries:
(i) Hong Kong's traditional exports to the United
Kingdom market already stand to suffer as a result of
United Kingdom entry into the European Communities.
injury would be increased if the United Kingdom, as a
result of harmonising its generalised preference offer
with that of the European Communities, had to exclude
Hong Kong from the list of beneficiaries.
This
(ii) It would, in Her Majesty's Government's view, be
advantageous for both the United Kingdom and the European
Communities to deal with Hong Kong in the context of the
generalised preference scheme, where the accepted
principle of "burden sharing" among donors would lighten
the load. A decision by the European Communities to
exclude Hong Kong from the scope of their offer would
/certainly