RESTRICTED
PA
163
610
IMMEDIATE
CYPHEP/CAT A
FM FCO 201629Z
RESTRICTED
FRAME
HKK 6/3.
(HK)
161
(166)
1973
TO IMMEDIATE GOVERNOR HONG KONG TEL NO 1137 OF 20 NOVEMBER INFO
BIC HONG KONG
YOUR TELS NOS 968 AND 909: EEC:GSP: TEXTILES AND FOOTWEAR.
1. UNLESS YOU SEE OBJECTION PLEASE PASS THE FOLLOWING MESSAGE TO
THE INDUSTRY IN ANSWER TO THEIR PETITION,
2. BEGINS. I AM GRATEFUL TO YOU FOR SENDING ME YOUR THOUGHTS
ON THE APPLICATION OF THE EUROPEAN COMMUNITY'S GSP TO TEXTILE
AND FOOTWEAR EXPORTS FROM HONG KONG.
3. YOU WILL REMEMBER THAT IN 1971 AT THE TIME OF THE NEGOTIATIONS
FOR BRITAIN'S ENTRY INTO THE COMMUNITY, HER MAJESTY'S COVERNMENT
FOUGHT HARD TO PROTECT THE GENERAL INTERESTS OF HONG KONG. THE
COMMUNITY EVENTUALLY AGREED TO ADMIT HONG KONG TO THEIR GSP,
VIBJECT. ONLY TO EXCLUSIONS FOR TEXTILES AND FOOTWEAR. THIS WAS A
MAJOR CONCESSION. AFTER CONSULTING THE GOVERNMENT OF HONG KONG
OUR NEGOTIATORS ACCEPTED THIS OFFER. AT THE SAME TIME MR RIPPON
MADE IT CLEAR THAT IT WAS OUR CONTINUING CONCERN TO AVOID
DISCRIMINATION AGAINST HONG KONG IN FAVOUR OF ITS PRINCIPAL
COMPETITORS AMONG THE DEVELOPING COUNTRIES.
4. IN SEPTEMBER OF THIS YEAR I DISCUSSED THE SITUATION AGAIN WITH
THE GOVERNOR IN THE LIGHT OF YOUR REPRESENTATIONS AND OF THE UK'S
IMPENDING ALIGNMENT WITH THE COMMUNITY'S SCHEME ON 1 JANUARY 1974. WE AGREED THAT, WHILE THE ARRANGEMENTS MADE BY OUR EUROPEAN PARTNERS IN 1971 MICHT HAVE SEEMED TO THEM NOT UNGENEROUS, IT WAS NO LONGER ACCEPTABLE FOR THE COMMUNITY TO DISCRIMINATE AGAINST HONG KONG. AN
IMPORTANT FACTOR WAS THAT, SINCE 1971, THE SITUATION HAD CHANGED TO THE DETRIMENT OF HONG KONG, IN THAT PHILIPPINES, THAILAND AND YUGOSLAVIA, ALL OF THEM SERIOUS COMPETITORS OF HONG KONG, HAD BECOME BENEFICIARIES UNDER THE COMMUNITY'S SCHEME FOR COTTON
TEXTILES.
5. ACCORDINGLY THE CHANCELLOR OF THE DUCHY OF LANCASTER, MR DAVIES,
RAISED THE QUESTION AT THE MEETING OF THE EUROPEAN COUNCIL OF
MINISTERS ON 6 NOVEMBER, OR DAVIES MADE CLEAR THE PRINCIPLE OF THE
REST
JUK'S POSITION