SATURDAY, SEPTEMBER 29, 1984
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+DEVELOPING COUNTRIES IN THE BOTTOM TIER, 1.E., THOSE WITH LESS THAN US$5 000 PER CAPITA GNP, WILL ENJOY MOST BENEFITS UNDER THIS PROPOSED GSP. SEVERAL KEEN COMPETITORS OF HONG KONG, INCLUDING TAIWAN AND SOUTH KOREA, COME WITHIN THIS PRIVILEGED TIER.
+WE OBJECT TO THE PRINCIPLE OF DETERMINING ELIGIBILITY UNDER THE GSP ON THE BASIS OF PER CAPITA GNP FOR A VARIETY OF REASONS, + MR TSANG EMPHASISED.
+FIRST, GNP IS AN UNRELIABLE AND ARBITARY YARDSTICK.
HONG KONG DOES NOT COMPILE BALANCE OF PAYMENTS STATISTICS AND THUS NO ONE, INCLUDING THE WORLD BANK, CAN COMPUTE HONG KONG'S GNP WITH ANY PRÉCISION. THE RELATIVELY HIGH GDP FIGURE FOR HONG KONG IS ILLUSORY BECAUSE IT CONTAINS AN UNUSUALLY LARGE SERVICES COMPONENT.
+SECONDLY, THE $5 000 CUT-OFF POINT PROPOSED WILL IRONICALLY 'GRADUATE' TWO OF THE OPEN ECONOMIES OF THE WORLD (HONG KONG AND SINGAPORE) WHICH OFFER FREE MARKET ACCESS TO THE USA.
+THIRDLY, IT IS WELL DOCUMENTED IN THE U.S. THAT GRADUATION OF ADVANCED BENEFICIAR IES LIKE HONG KONG HAS NOT BENEFITED THE LESS DEVELOPED COUNTRIES. ON PAST EXPERIENCE, THE MAIN BENEFICIARY WOULD BE THE DEVELOPED COUNTRIES, + MR TSANG SAID.
VALUE
UNDER THIS INEQUITABLE PROPOSAL IN THE HOUSE BILL, HONG KONG WILL BE DISQUALIFIED IN ABOUT 50 ITEMS MORE THAN AT PRESENT. OF IMPORTS IN THESE 50 ITEMS CAME TO US$460 MILLION IN 1983.
THE HONG KONG GOVERNMENT OFFICES IN WASHINGTON AND NEW YORK, AS WELL AS THE IMPORTERS AND RETAILERS ASSOCIATIONS HAD BEEN LOBBYING THE US CONGRESS AND ADMINISTRATION ON THE GSP ISSUE FOR THE PAST YEAR. THEY HAVE NOW INTENSIFIED THE IR ACTIVITIES TO COUNTER THE NEW HOUSE BILL.
MEANWHILE, THE TRADE DEPARTMENT HAS KEPT THE TRADE ADVISORY BOARD CLOSELY INFORMED OF DEVELOPMENTS ON THE PROPOSED GSP LEGISLATION. THE LOCAL TRADE ASSOCIATIONS HAVE ALSO BEEN KEPT GENERALLY IN THE PICTURE.
MR TSANG SAID THE PRESENT POSITION ON LEGISLATION REMAINS FLUID, BECAUSE THE HOUSE BILL HAS YET TO PASS THE FULL HOUSE OF REPRESENATIVES AND THE SENATE. THE US SENATE ADVOCATES A DIFFERENT BILL ON GSP, AND IT IS UNDERSTOOD THAT CERTAIN SENATORS ARE STRONGLY OPPOSED TO THE GNP CRITERIA IN DETERMINING GSP ELIGIBILITY.
+UNLESS THE SENATE AND HOUSE COULD REACH A COMPROMISE BEFORE OCTOBER 4. THERE WOULD PROBABLY BE NO REVISED GSP FOR 1985, FOR THE CONGRESS LEGISLATION PROGRAMME FOR THE YEAR COMES TO A CLOSE ON OCTOBER 5. IN THAT EVENT THE PRESENT GSP WILL PROBABLY HAVE TO BE EXTENDED THROUGH 1985.+
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AT PRESENT, ABOUT 17 PER CENT OF HONG KONG'S EXPORTS TO THE U.S. ARE DUTY FREE UNDER THE CURRENT GSP. THIS CAME TO OVER US$1.1 BILLION IN 1983. THE CURRENT GSP WILL EXPIRE ON JANUARY 3, 1985.
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