TNAG-0135-FCO40-171-Tariff-preferences-for-developing-countries-1969 — Page 132

- 2

would also not seem to accord with what is understood to be the

Community's position with regard to:

4.

(a) the acceptance of auto-selection; and

(b) that any exclusion should not be based on competitive

considerations.

It would even appear that Hong Kong would be treated worse

under this system than it would be under reasonable criteria of

"competitive need" applied on an item by item basis as

The latter

(i) under such a system Hong Kong would be accorded

normal treatment on most items where the "competitive

need" criteria adopted were not met in her case; and

(ii) the "competitive need" criteria would also be applied

to other developing countries in appropriate circumstances.

Alternative Pronosal

5. It is recognised that the Community does have some political and psychological difficulties in including Hong Kong in a scheme of preferences on exactly the same basis as the generality of developing countries. As, however, any damage to industries in Member States can be avoided by ceilings on sensitive products (the list of which can be added to in the light of experience),

and by surveillance procedures, any economic objections to the

Furthermore, inclusion of Hong Kong would appear to be much weaker.

there seems to be little to be gained by treating Hong Kong alone in a discriminatory manner and not applying similar criteria to some other countries claiming to be developing who may be equally as competitive as, or more competitive than, Hong Kong in the export

of certain products.

6. In view of the above preoccupations, however, a reasonable alternative treatment for Hong Kong could be along something

like the following lines:

(1) to exclude Hong Kong from preference on all items where

she provides more than 50 per cent of EEC imports from

developing countries;

/(2)