43.
Luft.
CONFIDENTIAL
Hong Kong's economy is resilient, and adaptable within
limits, and she could probably face Britain's imposition
of the Common External Tariff against her.
But it would be more serious if she were excluded from
the UNCTAD Generalised Preferences Scheme, and the
developed countries gave preference to her competitors.
We should, therefore, continue our efforts to ensure that
the USA and EEC formally give her the benefit of generalised
preferences, even at the price of some discriminatory
limitation of the quantity of her exports which can benefit,
though we have little hope of success.
45.
Above all, the most important action we should take is to
prevent the Common Commercial Policy developing in such a
way as to impose effectively discriminatory quotas against
Hong Kong; and to defend her interests against protectionist
trends in the USA.
46.
Hong Kong is so dependent on trade that her rising invisible
earnings cannot be expected to compensate for any real
damage to her exports. Financial aid is unlikely to provide
a solution to Hong Kong's problems. What she needs is
markets, not capital.
CRE3
21 July 1970
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