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worse from our point of view. I refer, in particular, to the limited list of beneficiaries, the more restrictive application on textiles and to a lesser extent footwear, the extension of butoirs below 50% beyond the Hong Kong list etc.. As against this the breakdown of sensitive list quotas between Member States probably gives too much to France and Italy for our liking, but the same applies to our competitors as well.
10.
I understand that HMG have agreed that the Hong Kong Government can, if it wishes, now take up with the Commission any points which it has on the implementation of the existing Community scheme. If we take this up (and I presume you will wish to) I would suggest that we confine our points to those which are important in themselves and where we stand some chance of effecting changes to Hong Kong's benefit. The points I would have in mind are the following:
11.
(1)
(2)
(3)
the possibility of Hong Kong administering the 20% butoirs on the Hong Kong sensitive items by means of export control. I see less chance of this being conceded now that the breakdown of quotas between Member States gives so much to France, but it will do no harm to try;
the origin items, namely
(i)
(ii)
to find some procedure to get non-discrimina-r tory treatment on 85.15, which now sticks out like a sore thumb. Why not something like cutting out the supplementary amount and limiting the butoir to 5%? But we could start off by asking the Commission what their origin rules will be on this item and then see how much of our exports seen likely to meet them;
to ascertain what is happening to the other five origin items. We could start off by saying naively that we assume that they have been dropped;
the French QRS, where we can ask the Commission's advice on how to ensure that these will not sterilise part of Hong Kong's preferential access rights.
I assume you will be discussing these recommendations with Mr. Dodge during his forthcoming visit and look forward to hearing your reactions.
Distribution:
Director, Hong Kong (3 copies)
AB., A.L.,
Mr. Kemmis (DTI)
Mr. Perceval (Trade Policy Department, FCO)
Mr. Graytt UKMIS, Geneva
Mr. Abbott
Mr. Hannay, CODEL, Brussels
Mr. Muir, UKDEL, OECD, Paris.
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DJCJ/ar.
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