our technical contacts on the adaptation of our
scheme to that of the Community", as well as, after
enlargement, "in the annual reviews in which we shall
participate as full Members". He added "We shall not
let those opportunities go by".
4. The Government of Hong Kong have now reminded
which were made public,
us of these public promises and have asked us to
honour them.
They argue that the effect of disccri-
mination by us against our own colony would be
politically very damaging; that USA, Canada and Japan
would use this as a precedent for discriminating
against Hong Kong, not only in textiles, but also,
for example, in electronics; and that discrimination
would inevitably divert trade away from Hong Kong. There is truth
even
all these assertions,
though
the
ap
[A]
X
amount of damage may not be great, at least at front. 5. If we are seen to discriminate against Hong Kong,
and to make no effort to avoid this, the effect on
our relations with Hong Kong and therefore on our
interests there, would be serious. At the same time
we shall begin phasing out our Commonwealth preference
for Hong Kong. This would make things worse. All
this comes at a time when we have a number of diffi-
culties with Hong Kong, some of which, including Sterling, are of substantial importance to the UK.
ashed The Frime Minister has directed that outstanding issues with Hong Kong should be resolved before his
Morcover the political damage will be caused visit there in January 1974. We cannot therefore wait until after alignment, but must fulfil the first
part of Mr Rippon's promise.
6.
this question
I recognise that to reopen with the Community
question of the application of the Community's
/GSP
the moment whe
NOTHING TO BE WRITTEN IN THIS MARGIN
bes in discrimination.