C. & 1, 200 2700206
200x100-7/71-B83972
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BY EXPRESS SPEEDPOST
EGRAPHIC ADDRESS:-***
**CANDIHONG" HONG KONG
OUR REF.:
YOUR RE? :
CR/EIC 230/20/1 VI
Dear Peren
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COMMERCE & INDUSTRY DEPARTMENT,
FIRE BRIGADE BUILDING.
HONG KONG,
26th September
19 74.
Many thanks for your letter of 11th September 1974.
I had taken it for granted that if it was necessary for you to go to Ministers again on the GSP you would most probably not do so till after the election. And I recognise that some consultation with the Hong Kong Government might be necessary after that stage, but that would surely be more likely to be on a more formal level?
What I had in mind was another of our informal dis- cussions to exchange our most recent ideas on the subject before you make your minds up on what you will propose to Ministers as the U.K. line in the further discussions in Brussels.
It might, I hope, be of some help to you to hear what we have to say and it seems to us that there would be, so far as UK/HK relations are concerned, political advantage for us both in our being able to let people know in Hong Kong that we have had the opportunity to discuss the matter with you and, we would hope, that we are both agreed on the best line to take.
To put it more, baldly: both the Conservative and the Labour Governments committed themselves to seeking improve- ments for Hong Kong. It is however necessary that the improve- ments you do seek are seen in Hong Kong to be improvements. And it seems to us that the best way, or at least a good way, to do this, would be for us to discuss the matter. Full and frank discussions, as they say.
There are several other subjects we might discuss besides GSP, such as textile restraints and the EEC (it seems very unlikely now that we shall have a negotiated solution before 1st January 1975), reverse preferences and the U.S. GSP, the MTN, and that hardy perennial, French import restrict- ions.
Our primary concem however is the EEC's GSP and in particular the super-competitive concept: the more we look at it, the less we like it. In the worst situation, where we secured not very much for textiles and footwear, and the super-competitive concept as now proposed was introduced, some 85% of our exports to the Nine would be at risk. We could never sell this in Hong Kong as a significant improvement in our position.
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Another point/