Brief No 4
Towards the end of 1973 it was discovered that large quantities of goods allegedly of Indonesian origin which were being imported into the Community were in fact of Hong Kong origin. The Hong Kong authorities have cooperated in prosecuting exporters practising this sort of origin fraud, while most of the goods in question have been prevented from reaching UK retail outlets by HM Customs and Excise, who expect to bring cases against a number of UK importers this year.
A similar case appears to have emerged in the shape of gloves ostensibly from Macao. Again, the Hong Kong Government has cooperated fully with HM Customs, although in this case prosecutions now seem unlikely.
5
Ths US is currently attempting to renegotiate its MFA bilateral agreement with Hong Kong. Initially the Hong Kong Government understood that the US problem related to sharp increases in exports following a period of under- utilisation of the quotas ("Surges") and offered their use of the flexibility provisions of the agreement for at least one year. But it now appears that in the event, in 1979 there has been relatively little under-utilisation; the US side has requested further concessions involving categories not subject to "surges" which would lead to a reduction in Hong Kong's exports in 1980. The Hong Kong Government fear this would be a precedent for a reduction of US obligations and would therefore detract from the credi bility of the MFA and the bilateral agreements. Following discussions at official level, Mr Blaker saw the US Economic Minister to register this point.
6
In general, relations with Hong Kong on the day-to-day working of the bilateral agreement have been good and several basket extractor cases have been resolved to mutual satisfaction during 1979. There is an unresolved problem concerning the definition of the weight of garments (whether this should include zips, buttons etc; the UK view remains that it should).