RESTRICTED
FELT IN THE UK) BUT THESE DO NOT RESULT FROM DEVELOPING COUNTRY IMPORTS. THE REAL DAMAGE IS DONE BY LOW-COST IMPORTS FROM EASTERN EUROPE AND SPAIN (AND FREE TRADE WITH ITALY) AND GENERALLY DEPRESSED ECONOMIC CONDITIONS, AMONG DEVELOPING COUNTRIES LATIN AMERICAN PRODUCERS OF LEATHER SHOES PROVIDE REAL COMPETITION FOR COMMUNITY MANUFACTURERS BUT HONG KONG DOES NOT PRODUCE THESE.
11. (ROME) WE UNDERSTAND THE ITALIANS THINK A GSP CONCESSION FOR HONG KONG WILL AFFECT THEIR EXPORT PROSPECTS IN OTHER EEC MARKETS. WE DOUBT THIS BUT IN ANY CASE CANNOT ACCEPT THAT THE PRINCIPLE OF COMMUNITY PREFERENCE SHOULD DETERMINE THE CONCESSIONS WE GIVE UNDER GSP, WHICH IS ESSENTIALLY A DEVELOPMENT CO-OPERATION MATTER.
12. WE HOPE THAT THE ITALIANS AND DUTCH WILL SIMILARLY LIFT THEIR RESERVES ON 12 NOVEMBER
CALLAGHAN
EUROPEAN ECONOMIC FILES DISTRIBUTION
EID
WED
FED
RID
HKIOD
3
RESTRICTED
ADDITIONAL DISTRIBUTION
FRAME
COPIES TO
HONG KONG GOVERNMENT OFFICE
6 GRAFTON STREET W1