TNAG-0240-FCO40-276-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 178

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was in his own self-interest to accept the medicine (i.e. the inclusion of

Hong Kong in the GSP), otherwise things would be worse for him. Tran

countered that, if I could set out my arguments on paper, he would do his best

with them. He felt that in theory, the Community might in the last resort be

prepared to do something special for Hong Kong but that this had been rejected

on grounds that the operation of a separate system would be too complicated.

He wondered whether, if Hong Kong were given a special preferential quota, she

would be prepared to practice "autolimitation".

•

6. Having ascertained that by this Tran did not mean voluntary restraint,

but only operating a duty free quota from the Hong Kong end, I said that I

thought that this could be done if necessary, i.e. by issuing "preference

certificates" for up to the limits entitled to preference. But it would be

administratively complicated and it was no good making it so restrictive that

the Americans would not accept it as a reasonable quid pro quo on the part of

the Community. The simplest method, and the fairest in my opinion, was to

exclude Hong Kong on textiles (and perhaps footwear) on the grounds that these

items had been excepted by the U.S. and/or the U.K. This would cover more

than half Hong Kong's current exports to the Community, but she could be

included on normal terms for the rest. If this were done, the Americans could

not complain. Tran, however, thought it would not be enough. Community

industries were worried about Hong Kong on other products besides textiles

and footwear.

7. We left it that, when I returned to Geneva, I would write a paper setting

out the arguments I had put forward and would send it to Tran. This I have

now done and I enclose a copy, together with a copy of my covering letter.

Copies have also gone to Hannay as he thought that CODEL would be interested to

see it.

8.

One point Tran mentioned at the end was that Braun, the Deputy Director General in the D.G. for Industry, was the "castle" of opposition to Hong Kong.

He thought I should try to have a talk úth him to put the case over in that

Unfortunately, in the time I had left in Brussels I was not able

quarter.

to arrange this, Mr. Braun being out at meetings for all the following day.

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