TNAG-0099-FCO40-135-Visit-by-Secretary-of-State-1967 — Page 27

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SPRAKING NOVES

EPTA. Preferences

I appreciate that of all our dependent territories Hong Kong

is by far the most banvily affected by these peverse preference 8.

Colony's difficulties were mentioned to me during my visit and I

understand that we shall siørtly be roosiving a nemorandum which is

being prepared by the Hang kong Govɑrrkant.

2.

The abolition of impert duties on alî industrial goods from

E.P.T.A. from 1st Jammiery, 1967 has created a situation in which

Commonwealth goods which are subject British duty are now lasa

favourably treated than corresponding gooản from E,F.T.à, ocuntries.

The goo-is affected

a small range of Commonwealth products for

which there is not a mil tariff. They are in the main goods containing

silk or mea-tade fibres, bat include also clocks, cigarotte lighters

and playing cards.

3. It was foresem at the time when E.P.T.Ā. was est blished that

preferences would arise against the above prodicts from the Commonweal

The passibility of reducing the duties charged on Camsommalth prodaota

in line with EPTA was examined. This notion, however, wœild have been

contrary to our obligations under G.A.T.2., unless equal redictions

were made in the rates od daty applicable to third countries. Che

latter course would not be scceptable boomze it would involve a loss

of protection for the U.K. industries concerned and a lowering of the

preferences which the Commonwealth currently enjoyed.

of the EFTA comtries, Portugal in particular, made considerable

headway in the U.K. maricet in cotton textiles during 1966. The

expansion in imports from Portugal has not been at the expense of

liong Kong which has a not ungsmorous omN TEY eta undor the present

hære not received

U.K. cotton textile import quota arrangements.

any official sœplaint from the Colony. I an informed that imports

/or