CONFIDENTIAL
CONSULTATIONS WITH HONG KONG: 23-25 NOVEMBER
GENERALISED PREFERENCE SCHEME
BRIEF NO. 2:
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BACKGROUND
Hong Kong's inclusion as a beneficiary in the UNCTAD General-
ised Preference Scheme has already been mentioned in a separate
brief on the enlargement negotiations. The prospect of Hong Kong
as a burden exclusively on the enlarged Community is the only
lever we possess to achieve Hong Kong's inclusion (even partially)
in the EEC preference scheme. This should gain the territory
admittance to the US preference scheme, and this is without ques-
tion the most important aspect from Hong Kong's point of view, as
42% of her exports are to the American market, and less than half
of them are in the textile and footwear categories excluded from
the US preference scheme. Failure to obtain access to the EEC's
scheme will certainly disqualify Hong Kong from the US scheme,
and presumably from the UK scheme also when this is merged with
the EEC scheme after enlargement. It is therefore clear that a
successful outcome of the EEC/Hong Kong GPS issue is vital to the
colony's economic future.
2.
The situation at present
(a) EEC. The point reached with the EEC has been described
in the main brief on our negotiating position. The Com-
mission are considering product exclusions and voluntary
control measures put to M. Tran by Mr. Jones. We cannot
be certain that the EEC will find it possible to accept
a compromise on the lines of the Jones proposals although
there have been unofficial indications that something on
these lines might be acceptable (Mr. Denman's conversa-
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CONFIDENTIAL