TNAG-0240-FCO40-276-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 132

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Beneficiaries

4.

Because of the difficulty of establishing any objective

criteria, the OECD countries broadly agreva in 1967 to accept the

principle of "self-election", by which any country with bona fide

claims to developing status would be eligible to benerit in all the

donors' markets. It has become clear, however, that most O2CD

countries are only prepared to uphold this principle with varying

reservations.

Line to Take

5. e continue to support the "self-election" principle, but we

shall need to take other donors' exclusions of beneficiaries into

account in order to maintain an equitable sharing of the burden.

We consider that dependent territories should not be excluded.

For your own information our main concern is that Hong Kong should

participate in the Scheme to the extent, at least, that her economy

will not suffer through her being totally excluded while her principal competitors (South Korea, Taiwan and Singapore) are included.

e consider that Hong Kong is no less entitled than they to be

considered "developing", and so eligible to benefit under the scheme.

Reverse Preferences

6. The United States' original position was that they could not

include in their offer developing countries which granted preferences to other donors (1.e. reverse preferences). They have since modified

this to the extent that they are now willing to include such countries,

provided they give an informal undertaking to phase out reverse

preferences. beginning in 1973. e and other developed countries

concerned (C, Canada, Australia and New Zealand) have argued that

this is primarily for the developing countries themselves to decide

and that it is unreasonable for the United states to make the

abolition of these preferences a condition of eligibility to benefit

from the United States scheme, which is much less extensive than the

CONFIDENTIAL

/Commonwealth