Mr Gallagher

Mr. Bottomley,

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1.

GENERALISED PREFERENCES: EEC OFFER AND DEPENDENT TERRITORIES

I understand that a number of questions have been asked

about UKDel Brussels telegram No 88 with particular reference

1

to Hong Kong. The purpose of the telegram is to inform us

that the EEC Council of Ministers have agreed to the

Commission's proposals on generalised preferences (though a

formal decision to implement still has to be made UKDel

Brussels telegram No 89); it has to be read against the sub-

stantial amount of detailed knowledge we already possess of

the EEC scheme.

2. Mr Bottomley has asked whether paragraph 3 of UKDel

Brussels telegram No 88 means that Hong Kong and other UK

dependent territories will be included. The answer is that

Hong Kong is certainly included as a beneficiary and that

there is nothing in the Commission's proposals which would

exclude any particular dependent territory, i.e. Gibraltar.

We shall seek confirmation of this when technical talks get

under way with the EEC next month on the adaptation of our

GPS offer to theirs. But all dependent territories will be

excluded from the EEC's offer on textiles and shoes, though

in practice this will bite mainly on Hong Kong and Macao.

To offset the effect of their inclusion of Hong Kong, the

EEC have lengthened their sensitive list, and in the process

have imposed a cut-off point for each individual ldc of 20%

or 30% of the quotas - or import ceilings on most of the

/sensitive

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