Hon
HỒNG KONG AND THE COMMUNITY'S GENERALISED SCHEME OF PREFERENCES (GSP)
Background
1. In the past, we have consistently supported the Commission's proposals to include Hong Kong textiles under the GSP but they have always been rejected by other Member States. The Commissionês proposals for the 1977 GSP again include Hong Kong textiles. Inclusion of some Hong Kong products as proposed would only mean tariff reductions on a small proportion of Hong Kong's textile exports. It would not affect the main problem which is that of physical quota access. The Department of Industry have therefore all along been prepared for us to grant this concession and Ministers have agreed generally that we should continue to support the inclusion of Hong Kong textiles: to do otherwise would be inconsistent with our policy in the past. In fact Hong Kong attaches a symbolic importance to obtaining this benefit, largely became some of her major competitors (eg, South Korea) already have it. 2. This year, all other members of the Community, except the Germans, have indicated they could acœpt the extension of the concession to Hong Kong. The Hong Kong Government know this and have been pressing us to lobby the Germans on their behalf. It has not been decided that we should do this.
3. Nevertheless, Minkters have agreed that we should not give publicity in the UK to our efforts on the Colony's behalf, in view of the pressures upon our own textile industry from low cost imports. (The Governor has been told this and has accepted it.) Moreover, given the state of the balance of our trade with Hong Kong, we undoubtedly need to bring home to the Colony that we are not to be taken for granted and there is a need for much greater reciprocity in their trading relations with us. The award of contracts worth £100m for the Mass Transit Scheme to British firms is only a start.
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