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and any other country enjoying association or comparable status. The Dutch
have recently mentioned the possibility of Hong Kong retaining the right of
duty-free entry with the United Kingdom alone, on the lines of the Morocco
Protocol. This would be bound to be at the expense of free circulation of
Hong Kong goods in the enlarged Community, and the continued concentration of
imports on the United Kingdom would not be welcome to certain sections of
British industry, though it would benefit the consumer.
evidence that such a proposal would be acceptable to the Six. We do not
therefore put it forward as an objective.
13.
3.
But we have no
But a
Nevertheless this problem is not as serious as it might at first sight
seem. In so far as man-made fibre goods are concerned Hong Kong (and other
Commonwealth exporters) already face a duty on entry into the United Kingdom
market. On cotton textiles we have announced our intention to impose a duty
of 15 per cent on Commonwealth imports from 1 January 1972. Over the re-
mainder (some two thirds) of Hong Kong exports to the United Kingdom the
application of the CET (at its moderate post Kennedy Round level) would not be
welcome to Hong Kong and would have some adverse effects on profits.
detailed study done by the Hong Kong Government in June of this year for
their Trade and Industry Advisory Board estimated the results of the applicat-
ion by the United Kingdom of the CET on goods other than textiles as "likely
to be less serious than previously envisaged. In many cases well developed
performance in other markets especially the US tends to indicate ability to
surmount tariff barriers and compete successfully with other suppliers".
14. It was with considerations of this kind in mind that the Hong Kong
Government in discussions with HMG in 1967 accepted that the United Kingdom
would have to apply the CET against Hong Kong imports (in other words there
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would no longer be any question of bidding for Association or Morocco Protocol 2177
i
treatment) over as long a transitional period as could be negotiated.
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UNCTAD GENERAL ISED PREFERENCES SCHEME
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15.
D
There may, however, be some possibility of mitigating the impact of the
tariff on Hong Kong through the development of the UNCTAD preference scheme.
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