2 -
Entu CEC - USP,
Commerce and Industry Departments Comments
174)
113./2
SU ÚCT 1974
Footwear
4.
HKK 6/548/1
In itself, the inclusion of Hong Kong's footwear in the Community Scheme while welcome will not be very meaningful in trade terms since the volume of our exports of footwear to the EEC is comparatively small, and declining. It will, however, have some presentational advantages for Hong Kong since it would put Hong Kong in a better position to argue for inclusion in other schemes, such as those currently being implemented by Austria and Switzerland, from which largely because of the discri- mination by the EEC, Hong Kong's footwear has likewise been excluded.
Textiles
1
The Commission's proposal to delay consideration of any changes in the arrangements for textiles is perhaps understandable since the EEC could place itself in a better bargaining position vis-a-vis low cost textile exporting countries by withholding any improvements to the GSP on textiles, until bilateral negotiations for restraints are joined and settlements reached. This will mean, however, that textiles imported from other bene- ficiary countries will continue to be admitted duty free under the scheme, while Hong Kong's textiles will continue to be excluded from the scheme. The fear has been expressed by the local textile industry that unless there is an early and favourable settlement of the textile problem, the trade that has been diverted from Hong Kong may be permanently lost to us.
Other Manufactured Products
6.
The EEC GSP is based on a tariff quota system whereby pre- determined amounts are allowed entry duty free. When these amounts are exhausted, unlimited amounts are allowed entry but they must pay the normal duty. In order to ensure that the tariff quotas are not dominated by a few beneficiaries only, the tariff quota incorporates a 'butoir' or cut-off point which, when reached by an individual beneficiary, precludes that beneficiary from securing any further share of the duty-free tariff quota. The 'butoir' is normally fixed at either 20% or 30% of the tariff quota. For so-called "sensitive" items, the tariff quotas are further divided in a fixed proportion, known as the "key", among Member States. In 1973, imports from Hong Kong reached the cut-off points in some 20 sensitive items although the tariff quotas as a whole were not filled by . other beneficiaries.