TNAG-0135-FCO40-171-Tariff-preferences-for-developing-countries-1969 — Page 107

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Mr. Carter,

CONFIDENTIAL

Reference.....

14. Stewart "Let

Hong Kong Department

Let us discure.

Lor 2319

Position of

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Generalised Preferences:

Hong Kong.

I sent you a copy of Mr.

Combs' minute to me of

8 September on this subject. As we see it the answers to Mr. Combs' questions are as follows :

neered hardoso of we entered the EPC ?

ishy?.

(i) The principle of "self-election" has not

yet been openly challenged in OECD but this is mainly because no country is anxious to make the first move. We know that considerable reservations exist which are bound to come into the open sooner or later. (Paragraph 7(b) of U.K. DEL OECD telegram No. 50 saving

copy attached gives some idea of the present position).

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(ii) I agree with Mr. Combs.

(iii) and (iv) A detailed answer would

I am

require considerable research which we do. not have the resources to undertake. however attaching an extract from a minute by Mr. Tarlton (Economists Department) which gives a general picture of what could be expected.

(v) You will now have seen paragraph 8 - 11 of Mr. Kemmis' letter of 2 September to Mr. Morris. If the EEC are thinking in terms of such a small quota for Hong Kong I can see no scope for any self-denying offers.

(vi) I agree with Mr. Combs that there are

.bound to be objections_to excluding any

particular country. The obvious candidates for exclusion would be Taiwan and South Korea which would otherwise be competing directly with Hong Kong in our markets. The exclusion of countries such as Spain and Greece, although it might be attractive for other reasons, would not benefit Hong Kong in the same direct way. (Portugal already enjoys duty-free entry to the British market.) It can be argued that we should threaten to exclude some particular country or group of countries for which the EEC have special responsibilities or which is in a position to bring pressure on the EEC to change their policy on Hong Kong. This could apply equally to the United States. The danger here is not only that these tactics might be ineffective but that we rather than the EEC or the United States would be likely to incur all the odium.

CONFIDENTIAL

/It