CONFIDENT LAL
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RECEIVED IN
ARCHIVES Ne, 41 Ž 5 MAR 1969
20 March, 1969.
62.
UNCTAD Preferences
I had a word on 20 March with Tran about the action he was taking within the Commission to promote the inclusion of Hong Kong in the Com- munities' UNCTAD preference offer. Tran explained that he was still at the stage of assembling statistics and he handed me a list of the Comm- unity's imports from Hong Kong in 1966 which he has just prepared. The list will be up-dated to 1967 and will then form the basis of Commission consideration of the Hong Kong issue.
2.
You will see that this list has a parallel column covering E.E.C. imports from Timor and Macao. When the figures are up-dated to 1967 there will be a third column for Israel. I said to Pran that I could quite understand the inclusion of Israel, since the Council was now considering Israeli inclusion in the UNCTAD preferences scheme as a means of fending off the Israeli request for an Association Agreement (Ukdel E.E.C. Telegram No. 47 Saving) but what was the significance of Timor and Macao? Tran explained that Timor and Macao had no real econ- omic significance, as would be seon from the figures of their exporta to the Community. But their inclusion could be rather important. There was a strong precedent for including them, since the Australians had included them in their preference scheme. But if Timor and Macao were included in the Community offer, then it would be very difficult to exclude Hong Kong.
3. I then asked Tran what sort of ideas he was thinking of putting up on Hong Kong. He replied that the proposal he would draft would suggest that Hong Kong be included by the Community as a beneficiary country; that for non-sensitive products, Hong Kong should get free entry like any other developing country; and that for semi-sensitive and sensitive products, Hong Kong should accept a voluntary limitation on its prefer- ential exports equivalent to a stated percentage of the global quota being given to developing countries. He envisaged that, on the last point, his proposal would contain three or four different hypotheses, with supporting statistics, aetting out the size of the voluntary limits to be accepted by Hong Kong, assuming that Hong Kong were given, say 5%, 10%, 15% and 20% of the global quota.
B. Tran said that he had no indication yet as to whether he was likelj to get this idea accepted, first by the Commission and then by the member states. But he emphasised that, however reserved Hong Kong might be about voluntary tinitations on exports, the attraction of his prop- osal was that there would be no formal exclusion af Hong Kong from any part of the scheme.
5. On the general aspects of the preference scheme, Tran gave me copy of the Commission's first, very general assessment of the offers so far tabled in 0.E.C.D. a copy of which is enclosed. He said that the Community were worried about the delay in the presentation of the
/American
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R. Goldsmith Esq.,
BOARD OF TRADE.
CONFIDENTIAL
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