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CONFIDENTIAL Reference....
Mr Braithwaite, EID(E)
+43
HONG KONG AND THE GENERALISED SCHEME OF PREFERENCES
1.
You will have seen UKREP Brussels telno. 4063 reporting the recommendation from the Commission that Hong Kong should be excluded from the Community's preference scheme for textiles in 1975. We had expected this, but it will be nonetheless unpalatable to Hong Kong.
2.
The Director of Commerce and Industry of Hong Kong, Mr Jordan, has been pressing the Department of Trade for a meeting next week on the whole issue.
I attach a copy of Mr Jordan's letter to me of 26 September covering another letter to Mr Preston. This was in response to a proposal by the DOT that no meeting should take place until the end of October, by which time they would have been able to consult their new Ministers. Mr Jordan's point is that Hong Kong should get in on the discussions while official opinion is still forming and before anything is put to Ministers. This is a valid aim.
We have always accepted that the way to deal with Hong Kong is to consult them first rather than inform them after a decision is taken.
3.
Nevertheless there is no sense in having a meeting immediately before the UK elections. Not even official policy can be discussed in ignorance of the nature of the new Government. I have said this to Mr Kidd, the Hong Kong Government Commissioner, who says he agrees. He has therefore proposed to Mr Preston a meeting during the week beginning 21 October (Mr Preston will be away the previous week). I said we would go along with this.
4.
If Mr Preston agrees, then we need take no action (beyond replying to Mr Jordan's letter) provided that the DOT also agree that any submission to Ministers can also await the meeting. If they do not agree to hold over such a submission then I think we must intervene. If Hong Kong are pre-empted, their representations will move immediately to the Governor/ Secretary of State level and the presentational issue in Hong Kong will be greatly complicated.
5.
If the meeting is postponed as proposed, then I hope the European side of the Office will agree to attend (as we shall do) at Head of Department level. There is a presentational aspect to this too, in terms of our relationship with Hong Kong.
6.
You will be able to advise on whether there is anything we can do in Brussels. I hope there is. As I have minuted before, Ministers' undertaking to press resolutely for the admission of Hong Kong to the textiles GSP in 1975 was a hostage to fortune which got us out of trouble in 1974, at the risk of an even greater row in 1975 if we failed. If Hong Kong remains excluded from the textiles GSP but is subjected to further restrictions in
CONFIDENTIAL
/the general