in
trado as a result of a 10% butgir., The other countries affected, would be, order, Brazil (15m), S Korca (5m), Argentine (3m), Singapore (83), the Philippines (2m) and Mexico (1m). In total about 110m or trado would be affected. Singapore is the only IDI country caught, and then on a fairly minor scale; Pakistan and India would escape through the per capita income exemption. We cannot tell how much sharper the erfoot woule be in future years.
Hong Kongia vieva
15. In a letter written on 25 March (before the Brussels meeting) Kr Jordan
saidi
total
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"We are pleased that you have kept us so woll informed of developrents in Commission thinking on this issue: we are not so pleased with the way the thinking is going. No are concerned ca sevcial points. First, it is not clear whether tho Commission proposals embrace textiles and footwear,, If they do but our textiles and footwear continue to be excluded then the proposals have no attraction for us at all;, because we think the effect of the low butoir will bo to divert trade to: beneficiary countries for whom the butoir is higher. If textiles and footwear aro included, thon it will be clear to laporters that textile immorta from Hong Kong are likely to reach the butoire so quickly that the diversion of trade to other beneficiary countries will contime, Our footwear people might do X a little better but their contribution to our total trede is already
marginal and deciârdug.
As we understand it, the present Commission proposals stem from the Kerbor Statos' desire for something to be done about the "super-competitive". In our view, if there is such a thing as a super-competitive beneficiary, Hong Kong isn't one because:
(a) the trade figures show we aren't, and
(b) the butoir syston preventa us becoming one.
Surely the need to deal with the "super-competitiva" could arise only whore two or three beneficiaries between then fill the tariff quota leaving no room for the other beneficiaries, In most cases where the Commission has published notifications that Hong Kong has reached the butoir, it appears that the tariff quota as a whole was not filled - at least there has certainly been no notification that it has. It seems therefore that it cannot be said that Hong Kong has prevented other beneficiaries from securing benefits,
Another aspect of the present proposals we do not like is that we foar a very low butoir will have the same or very siciler trode diversion effects as total exclusion. If it does, since in both 1972 end 1973 we hit the butoir in soma 2 products outside textiles and footwear, cur trade in those products is likely to be permanently diverted to other suppliors. Although this might be equally true of Yugoslavin and Louth Korea an examination of the butoir-by-product-by-country breakdown iniicates that Hong Kong, Korea and Yugoslavia are not reaching the butoira in the same products. In those items whero Hong Kong has reached the butcir, cur competitors have some significant trade. «here our competitora have reached the butoir, however, Hong Kong has little or no trade, and for
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