(242)
IMMEDIATE
CYPHER CAT A
GPS 250
FM FCO
1813052
RESTRICTED
RESTRICTED..
14KK 121
124/616/1
2?
¿No R$ 24/11
TO IMMEDIATE BTC HONG KONG TELEGRAM NO 88 OF 18 NOVEMBER 1977
FOR MARCH FROM STEWART
YOUR TELNO VTC 114 OF 9 NOVEMBER
30€
1. THE UK VETO ON THE COMMUNITY MANDATE WAS LIFTED ON 18 OCTOBER
WHEN AGREEMENT WAS REACHED ON ALL POINTS EXCEPT COTTON YARN IMPORTS. BI-LATERAL NEGOTIATIONS WITH HONG KONG OPENED ON
19 OCTOBER. HONG KONG PROPOSED USING EXPORT AS OPPOSED TO IMPORT CONTROL, CRITIZED EEC METHODOLOGY ON IMPORT PENE-
TRATION AND EXPRESSED SERIOUS RESERVATIONS ABOUT THE EFFECT OF THE PROPOSALS ON THE HONG KONG ECONOMY. DURING 27/28 OCTOBER
HONG KONG AGREED PRIVATELY TO WORK ON BASIS OF EEC FIGURES IN
RETURN FOR EMPLOYMENT OF EXPORT CONTROL TO MONITOR THE AGREEMENT,
CM 28 OCTOBER HONG KONG PRESENTED COUNTER PROPOSALS TO THE
COMMUNITY WHICH WERE ATTACKED FOR THEIR LACK OF FLEXIBILITY
AND THE INADEQUACY OF THEIR COVERAGE.
2. ON 4 NOVEMBER TRAN HELD A PRESS CONFERENCE DEMANDING AN
AGREEMENT WITH HONG KONG BY 10 NOVEMBER AND ACCUSED HONG KONG
OF LEADING AN ANTI-EEC FRONT AT GENEVA, HONG KONG REACTED VIOLENTLY, ACCUSING TRAN OF BEING THREATENING AND ATTACKING THEM DESPITE THE KNOWLEDGE THAT HONG KONG WAS ABOUT TO PRESENT
HER OWN PROPOSALS. THESE PROPOSALS ATTEMPTED TO BREAK DEADLOCK BY AGREEING TO THE EEC STABILISATION REQUIREMENTS. THE COMMISSION CLAIMED THE PROPOSALS IGNORED THE NEED FOR SACRIFICES FROM
DOMINANT SUPPLIERS, FAILED TO PROVIDE A SYSTEM FOR GROUPING PRODUCTS ACCORDING TO SENSITIVITY AND DID NOT USE THE NEW EEC
METHOD OF CATEGORISATION. ON 7 NOVEMBER HONG KONG, IN THEIR TURN,
ACCUSED THE COMMISSION OF REFUSING TO MAKE ANY CONCESSIONS AND
OF GIVING HONG KONG TRADE TO OTHER EXPORTERS. TRAN REPLIED BY MAINTAINING THAT THE EEC WOULD CUT THE RESERVE KEPT FOR HONG KONG,
/ AT
RESTRICTED