TNAG-0249-FCO40-285-Effect-of-entry-of-UK-into-EEC-on-exports-from-Hong-Kong-1970 — Page 105

49

Reference.......

Mr Kinnear, Hong Kong Dept.

Board of Trade Paper on Hong Kong

I have delayed comment on the above paper in view of the current inter-departmental debate on Hong Kong's likely status in the UNCTAD Generalised Preferences Scheme and possible UK moves on Hong Kong's behalf. 2. I have no major objections to the paper, and even though it assumes the worst for Hong Kong in the GPS context before this has clearly come to pass, this is

With re unfortunately a reasonable working hypothesis. gard to emphasis, I wonder if the statement in para. 13, para.13, second sentence, that UK quota controls will be replaced with a simple tariff in January 1972 should be quite so definite in view of the current unresolved debate on textiles in the GPS and whether UK should implement quot

in this configt. as would "since it is envisaged that we shall have replaced ...." be at once more accurate and at the same time not too wounding to Mintech?

3. Para 21. Last sentence. The EEC were alongside our- selves in defence of "self-election" when the issue was debated privately within the OECD Trade Committee on 16 July, which does not of course mean that they will observe it in practice when the Americans and Japanese refuse to do so. This last sentence could thus read "However, the other major donors are very unlikely to adhere to the principle".

4. Para 23. line 8. UK's exclusion of Hong Kong's main competitors is of course now under departmental consideration. It is possibly jumping the gun to assume an automatic retaliation on our part, so "we would have to consider retaliating" is perhaps more correct a form of words at this stage.

5. Para 29. Sentence 6. This is not a TPD department tal point but it strikes me that it would take more than a sustained diplomatic effort to put over this 'broad philosophical thesis", it would take an example of heroic sacrifice by the UK which domestic industry would be the last to encourage.

6. Para 31. Sentence 5. In the light of the increa- sing devolution of economic powers to Hong Kong, is the prospect of a colonial government retaliating against the metropolitan power still so difficult to envisage?

Auch and Perceval

Michael Perceval

Trade Policy Dept. 4/8/70

This answid to late 8 boken to Pefecimal This agues to feet'sk.

p.a.

6/5770

Page 105Page 106