TNAG-0239-FCO40-275-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 114

CONFIDENTIAL

To: Director of Commerce and Industry, Hong Kong.

From: Counsellor (Hong Kong Affairs), Geneva.

Memorandum N⚫.118

File No. GVA/10/8/1

243

Date: 21 September 1970

My memoranda No. 116 of 17 September and No. 115 of 14 September

(230)

O.E.C.D.

Generalised Preferences. Position of Hong Kong

228

This memorandum reports on the more important informal contacts I had with members of other delegations during the meetings of the Ad Hoc Group on 7 9 September and the Trade Committee ●n 14 15 September. It also attempts a general analysis of the present position from Hong Kong's point of view.

General

2.

There is no doubt at the present time that, when the Trade Committee considers the preferences question, the issue of beneficiaries hangs over the meeting like an unwelcome phantom and that this ghost already stalks the corridors of the prestigious new OECD building in the Rue de Franqueville. Although there have been a few furtive discussions, mainly over the lunch or dinner table, between the more important donors, these have produced no real meeting of minds. On the other hand, substantive discussion on the issue has been kept away from the Committee table by mutual agreement.

3. The issue really boils down to a limited number of countries. This is because the first principle is that no-one wishes to offend the Group of 77 in UNCTAD by excluding any of their number. It is for this reason that, e.g. Yugoslavia and several marginally developing countries in Latin America (Argentina, Uruguay, Mexico, Venezuela, Chile) are virtually certain to get past the boom. The question marks hang over

(a) those who will certainly be excluded by all or most donors,

largely on political grounds, i.e. Rumania, Cuba, North Korea, North Vietnam;

(b) the Mediterranean countries, i.e. Greece, Turkey, Spain, Portugal, Israel. The U.S. will almost certainly exclude them on grounds of reverse preferences. The EEC position and that of some other donors is more equivocal;

(c) Hong Kong (of course) and, because of the excuse which

seems to be finding more and more favour, possibly other dependent territories.

I have not included in this list Taiwan, South Korea and Singapore because, although these are in many ways Hong Kong's most dangerous_competitors, especially in the American and Japanese markets, I have yet to discover any intention to exclude any of these three on the part of any donor (except in the last resort the U.K. in the case of Taiwan and South Korea).

4. In the last week or two there have been certain changes announced by individual donors, or attitudes clarified, which will tend to make some countries' schemes more liberal and thus more discriminatory against Hong Kong if she is excluded.

CONFIDENTIAL

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