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5. WE APPRECIATE THE IRISH CONCERN ABOUT THE EFFECT OF HONG KONG INCLUSION ON THEIR MARKETS BUT THINK THIS FEAR EXAGGERATED (FOR DETAILED ECONOMIC ARGUMENT SEE PARA 7 BELOW). THE IRISH ALREADY AGREE THAT, BECAUSE OF THEIR TREATY DEROGATION, THERE WILL BE NO
DIRECT EFFECT IN 1975. WE SEE NO REASON WHY A FURTHER SPECIAL
ARRANGEMENT CANNOT BE MADE IN 1976. IT IS IN THE COUNCIL POWER
TO DECIDE THIS. WE SHOULD SUPPORT ANY REQUEST THE IRISH MIGHT MAKE.
6 THE IRISH ARE CONCERNED, TOO, ABOUT RE-EXPORTS FROM THE UK OF
FOOTWEAR IMPORTED FROM HONG KOG. IF THIS IS RAISED YOU SHOULD SAY
THAT THERE IS NO REASON TO THINK THAT THIS TRADE, WHICH IS TRADITIONAL, WOULD BE AFFECTED BY A GSP CONCESSION FOR HONG KONG.
WE WOULD NOT EXPECT THE VOLUME OF RE-EXPORTS FROM UK TO IRELAND
OF HONG KONG SHOES TO GO UP OR PRICES TO FALL AS A RESULT. BUT
WE ARE WILLING TO EXAMINE ANY PROBLEMS THAT MAY ARISE.
7. THE ECONOMIC ARGUMENTS ARE AS FOLLOWS:
(1) THE COMMISSION'S PROPOSALS ARE VERY MODEST. THE PRESENT GSP
FOOTWEAR QUOTAS, WHICH IRELAND HAS ACCEPTED IN 1974, WILL BE
INCREASED BY ONLY 8 PER CENT NEXT YEAR FOR ALL BENEFICIARIES. HONG
KONG'S LIKELY SHARE OF THIS WOULD NOT BE VERY GREAT.
(11) IRELAND HAS ONLY ONE PER CENT OF THE COMMUNITY GSP QUOTAS. THIS IS EQUAL TO ONLY A FRACTION OF HER TOTAL FOOTWEAR IMPORTS.
111) HONG KONG'S PRESENT EXPORTS TO IRELAND ARE VIRTUALLY NON-
EXISTENT. BY FAR THE GREATER PART OF HER IMPORTS COME FROM THE UK
(70 PER CENT) AND OTHER WESTERN EUROPEAN COUNTRIES (ITALY AND SPAIN) AND EASTERN EUROPE. DAMAGING COMPETITION COMES FROM THE LAST
MENTIONED.
8. WE THEREFORE HOPE THE IRISH WILL LIFT THEIR RESERVE ON THE
INCLUSION OF HONG KONG FOOTWEAR IN THE GSP AT THE COUNCIL OF FOREIGN
MINISTERS MEETING ON 12 NOVEMBER
9. ROME AND THE HAGUE, PLEASE APPROACH THE ITALIAN AND DUTCH
AUTHORITIES TOO, DRAWING CENERALLY ON THE ABOVE AND STRESSING THE IMPORTANCE WE ATTACH TO ENDING THE DISCRIMINATION AGAINST HONG KONG
AS A RENEGOTIATION OBJECTIVE. HONG KONG IS TOTALLY DEPENDENT ON
TRADE AND NEEDS THE SAME CONDITIONS AS HER COMPETITORS TO MAINTAIN
HER EXPORT FARNINGS. THE HONG KONG FOOTWEAR INDUSTRY IS IN DECLINE
INTER ALIA THROUGH EXCLUSION FROM PREFERENCES.
16. (THE HAGUE) YOU SHOULD UNDERLINE THE MINIMAL IMPACT OF THE
COMMISSION'S PROPOSALS ON THE EUROPEAN FOOTWEAR INDUSTRY. FOOTWEAR PRODUCERS IN NORTHERN FUROPE ARE CERTAINLY IN DIFFICULTIES (ALSO
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/ FELT