CONFIDENTIAL
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HONG KONG AND THE COMMUNITY'S GENERALISED SCHEME OF PREFERENCES.
PROBLEM
1. In 1971 we agreed with the Six during the enlargement
negotiations that Hong Kong should be admitted to the Community's
GSP subject to exclusion of benefits for her textiles and footwear.
This means that from 1 January 1974, when we align with the
Community's GSP, we should discriminate against Hong Kong in favour
of her principal competitors among the developing countries, who do
receive benefits on footwear and textiles. The Hong Kong and
European sides of the Office are unable to agree whether the
question of the exclusion of Hong Kong textiles and footwear should
be re-opened in Brussels.
BACKGROUND
2. On 1 February 1971 Mr Rippon accepted the Community's offer on
Hong Kong which was more satisfactory from our (and Hong Kong's )
point of view than we had at one time feared. The Community offer
was extracted with difficulty. Mr Rippon agreed that the case of
Hong Kong was
settled definitively in the framework of the
enlargement negotiations. However he added that Hong Kong was and
would remain after enlargement a dependent territory of the United
Kingdom and went on: "It follows from this that it must be our
continuing concern to avoid discriminating against Hong Kong in
CONFIDENTIAL
/favour