CONFIDENTIAL
Mr Butler (EID(External))
Reference
88
HONG KONG AND THE ENLARGED EEC'S GSP
1. As you know there is a problem about the possible effects on Hong Kong of our alignment with the Community's GSP. As a result of talks with Hong Kong officials in July Trade Relations Department drafted a paper for submission to our Ministers recommending that we should try for an arrangement with the Community that would meet Hong Kong's needs.
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of the TRD draft is attached for ease of reference. This draft was not, however, proceeded with because, so I understand, your department was doubtful whether they could accept its underlying assumptions and wished to consult Mr Robinson.
2.
Unfortunately, we are now getting forced up against a very tight timescale. In anticipation of a decision by FCO Ministers, CT Division of the DTI have drafted a paper for the Official Committee on Europe which sets out the case, from their point of view, for an arrange- ment which would, largely incidentally, meet Hong Kong's main requirements. In this paper they record that "the political aspect (of the question of Hong Kong) is being studied by the FCO". The DTI paper is addressed to the UK Textile Working Party on which the FCO is represented. They have asked for comments this month so that the paper can be submitted for consideration to the Official Committee on Europe before the next meeting of the Community's GSP Working Group in Brussels on 12 September.
3. Secondly, the Governor of Hong Kong will be having discussions with Mr Royle and the Secretary of State during the week beginning 10 September.. Ministers will expect to have a settled view from officials for discussion with the Governor, who has already made strong representations about the political importance of the question to Hong Kong.
4.
Third, Mr Denman of the DTI is going to Hong Kong for talks with the Director of Commerce and Industry there on 7 September. Mr Denman is primarily respon- sible for this subject in the DTI and the Hong Kong Government will expect definitive discussions with him.
5. If we
are to meet all these deadlines we will have to work very fast. If you can accept the broad outline of TRD's submission it can be put to our Ministers quite quickly, and I have little doubt that Mr Royle and the Secretary of State would accept it. But if you wish to maintain the position that we have no option but to accept the Community's GSP in its present form, then we are going to have very substantial difficulties both within the FCO and with the DTI, even before the matter reaches our Ministers. Thereafter, whatever
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CONFIDENTIAL