A CC
98
16STON GIVEN TO SEND FOLLOWING THIS WAY
OU HUNCAID LONDON
GPS
Naked nosed in pr
tuboussión
PA
CYPHER/CAT A
FM HONG KONG 110645Z
CONFIDENTIAL
TO IMEDIATE HONG KONG GOVERNMENT OFFICE. LONDON TELNO 202 OF 11 SEPTEMBER.
YOUR TELEGRAM 148.
ALTHOUGH WE HAVE ALREADY SENT TO LONDON FOR THE GOVERNOR A BRIFF ON THE EEC GPS ISSUE WE HAVE BEEN GIVING THIS FURTHER THOUGHT IN THE LIGHT OF YOUR REPORTS.
2. WE HAVE ALREADY PUT FORWARD THE ARGUMENTS FOR OUR CASE. THE PRESENTATION OF THE CASE IS A MATTER FOR HMG, BUT WE HAVE SOME IDEAS ON THIS WHICH THE GOVERNOR MIGHT CARE TO PUT FORWARD.
3. HONG KONG'S SUGGESTION THAT TEXTILES AND FOOTWEAR MIGHT BE WHOLLY EXCLUDED FROM THE ENLARGED EEC'S SCHEME IS A MATTER FOR HMG TO CONSIDER ON WIDER GROUNDS THAT HONG KONG'S INTEREST. WHILE IT WOULD SUIT US AND HMG FINE, WE RECOGNISE THAT IT IS UNLIKELY TO RE POLITICALLY ACCEPTABLE TO THE OTHER MEMBER STATES. BUT THE IDEA THAT THE EEC'S DISCRIMINATORY EXCLUSION OF HONG KONG TEXTILES AND FOOTWEAR FROM THEIR SCHEME SHOULD BE EXTENDED TO THE UK IS MORE DIRECTLY OF CONCERN TO US.
14·1x
L. WE WOULD HOPE THAT IN THE WORKING CROUP HMG WOULD TAKE THE LINE THAT THE EXTENSION OF THIS EXCLUSION TO HONG KONG WOULD CAUSE GREAT DIFFICULTY. MONG KONG ALREADY HAS TO ACCEPT THE EROSION AND EVENTUAL DISAPPEARANCE OF THE COMMONWEALTH PREFERENCE IT HAS LONG ENJOYED AS A DEPENDENT TERRITORY OF THE UK A STATUS THAT CONTINUES ALONG WITH HMC'S RESPONSIBILITY FOR HONG KONG, HONG KONG ACCEPTS THAT THE BENEFITS OF CP ARE TO BE REPLACED ONLY TO THE EXTENT THAT WE SHALL ENJOY BENEFICIARY STATUS UNDER THE EEC'S GPS. BUT TEXTILES (INCLUDING CARMENTS) ARE STILL THE BULK OF HONG KONG'S EXPORTS. NEARLY 20 PER CENT OF THE TOTAL REPEAT TOTAL VALUE OF OUR EXPORTS IN 1972 WERE REPRESENTED BY TEXTILE EXPORTS TO THE NINE.
5. IN OTHER WORDS, TO CONTINUE TO DENY HONG KONG PREFERENCE ON TEXTILES AND FOOTWEAR WOULD BE LARGELY TO NEGATE ITS BENEFICIARY STATUS.
6. WE WOULD HOPE THAT THE UK REPRESENTATIVES WOULD THEN SAY THAT UNLESS SOME MODIFICATIONS OF THE EEC SCHEME CAN BE CONSIDERED, AS HAS INDEED BEEN ENVISAGED ALL ALONG THE SCHEME ITSELF IS FORMALLY SUBJECT TO ANNUAL REVIEW AND NOW IS THE APPROPRIATE TIME THEN HMG WOULD FIND IT DIFFICULT TO AGREE TO APPLY THE SCHEME FROM 1 JANUARY 197. ITS MEMBERSHIP OF THE CEC IMPLIES THAT IT IS ENTITLED TO TAKE PART IN THE ANNUAL REVIEW AND TO PROPOSE MODIFICATIONS. IN DISCUSSIONS YESTERDAY WITH SIR CHRISTOPHER SOAMES AND HIS OFFICIALS THIS POINT WAS READILY CONCEDED. ALTHOUGH SIR CHRISTOPHER COULD SEE LITTLE PROSPECT OF AGREEMENT ON FULL INCLUSION OF HONG KONG OR OF EXCLUSION OF TEXTILES AND FOOTWEAR (INDEED HIS ATTITUDE WAS QUITE UNSYMPATHETIC), HE SAID THAT THE FACT THE UK HAD HITERTO TOTALLY EXCLUDED TEXTILES AND FOOTWEAR CREATED QUOTE A PROBLEM WHICH IS COING TO HAVE TO BE RESOLVED UNQUOTE. HIS OFFICIALS SAW THE POSSIBILITY OF SOME COMPROMISE FORMULA WHICH MIGHT SERVE TO MEET, IN PART AT LEAST, THE HONG KONG OBJECTIONS: ALTHOUGH NOT SPECIFICALLY TAILORED TO THEM. THEY PURPORTED TO BE DEVOID OF IDEAS, BUT SUSCEPTIBLE TO SUGGESTIONS.