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WE DO
BE COMPETING WITH SOME 170 OTHER DENEFICIARIES, COULD CLEARLY BE VERY LARGE. ASSUMING EVEN THAT IT WERE AS HIGH AS 10% NOT THINK IT COULD IN PRACTICE BE HIGHER - THAT WOULD AMOUNT TO NO MORE THAN 3.2 MILLION UNITS OF ACCOUNT (EQUIVALENT TO ABOUT £1.3 MILLION) FOR FOOTWEAR EXPORTS TO ALL MARKETS OF THE COMMUNITY, AND THE REPUBLIC OF IRELAND, HAVING ONLY 15 OF THE COMMUNITY CSP QUOTAS, WOULD BE LIABLE TO TAKE HONG KONG FOOTWEAR EXPORTS TO A VALUE OF ONLY ABOUT 32,000 UNITS OF ACCOUNT (AROUND £13,369) UNDER
THE QUOTA.
3. HONG KONG'S PRESENT EXPORTS OF FOOTWEAR TO THE REPUBLIC OF IRELAND ARE VIRTUALLY NEGLIGIBLE: IN 1972 THEY ACCOUNTED FOR ONLY ABOUT 0.5% OF TOTAL FOOTWEAR IMPORTS, AND IN 1973 (AMOUNTING, I UNDERSTAND, TO £46,008) FOR ONLY 9.69. BY FAR THE GREATER PART OF THE REPUBLIC'S FOOTWEAR INPORTS ARE FROM THE UK (OVER 70% II. 1973), OTHER WESTERN EUROPEAN COUNTRIES SUCH AS ITALY AND SPAIN, AND FROM EASTERN EUROPE, PERHAPS THE MOST DAMAGING COMPETITION FOR THE DOMESTIC
INDUSTRY COMES FROM THE LAST MENTIONED.
4. WE DO NOT BELIEVE THAT ACCEPTANCE OF THE COMMISSION'S PROPOSAL WOULD INVOLVE ANY RISK OF RE-EXPORTS FROM THE UNITED KINGDOM OF FOOTWEAR OF HONG KONG MANUFACTURE. THIS IS BECAUSE, GIVEN THE REASONABLE ASSUMPTION REFERRED TO ABOVE THAT HONG KONG'S SHARE OF THE INCREASED QUOTA WOULD NOT EXCEED 3.2 MILLION UNITS OF ACCOUNT, IT WOULD BE INSUFFICIENT TO COVER THE COLONY'S EXISTING TRADE WITH THE UK ALONE, WHICH, IN 1973, AMOUNTED TO 19 MILLION UNITS OF ACCOUNT. IT THEREFORE SEEMS TO US MOST IMPROBABLE THAT THERE WOULD DE ANY RE-EXPORT TO THE REPUBLIC OF IRELAND OF THE SMALL QUANTITY OF HONG KONG FOOTWEAR THAT WOULD ENTER THE UNITED KINGDOM DUTY FREE. IF SUCH AN IMPROBABLE CONTINGENCY AROSE, HOWEVER, I AM INSTRUCTED TO SAY THAT MY GOVT WOULD BE WILLING TO EXAMINE WITH YOUR GOVT ANY PROBLEM THAT MIGHT ARISE.
5. THE GOVT OF THE REPUBLIC OF IRELAND ALREADY AGREE, I THINK, THAT BECAUSE OF THEIR TREATY DEROGATION THERE WOULD BE NO DIRECT EFFECT IN 1975 AS A RESULT OF ACCEPTING THE COMMISSION'S PROPOSALS. WE SEE NO REASON WHY A FURTHER SPECIAL ARRANGEMENT COULD NOT BE MADE IN 1976. IT IS IN THE COUNCIL'S PU..ER TO DECIDE THIS, AND I AM FURTHER AUTHORISED TO SAY THAT MY GOVT WOULD SUPPORT ANY REQUEST THAT YOUR GOVT MIGHT MAKE.
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