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6.
While Mr. Davies' strong statement in Brussels in November 1973 is appreciated, nevertheless HMG dods not intend to do anything to remove discrimination against us in 1974. We note however that the UK has agreed to the inclusion in 1974 of new countries into the EEC's generalised system of preferences for textiles: why not Hong Kong as well?
7.
We have been told that HMG will press resolutely' for inclusion of HK textiles in the GSP in 1975 which is all very well but facts are facts and we would like to ask what is to happen if that attempt fails? Will HMG 'press resolutely' again for inclusion in 1976? And what is to happen in the meanwhile? And if this toe fails?
8.
We think that HMG has failed to understand the full economic repercussions likely to be felt in HK, besides the less of confidence which is already being expressed about HMG's ability to protect our interests, which is not limited only to this sector of our economy.
9.
HK.
Our main fear is the permanent diversion of trade from The petition which was sent to the Secretary of State made clear that over the past two years, orders for textiles and foot- wear were being diverted from HK to the sixteen suppliers.with duty free access to the markets of the EEC. This process is accelerating and, if nothing is done, will continue throughout 1974. What is perhaps not fully understood is that even if the discrimination against HK is.removed in 1975, it will, in practice, continue to apply. This is because in the textile industry we bock orders some nine months ahead of delivery dates to allow us, in turn, to order our raw materials and to manufacture the goods. Since the annual review of the EEC GSP is notheld until late in
notheld
the year, buyers will not know whether or not HK textiles will be granted duty free entry, at the time they place their orders. They will continue therefore to turn to our competitors for supplies. This means, assuming we do get GSP treatment in 1975,
/that