RESTRICTED
South Korea.
However, these threats were
nver publicly made as their efficacy was
thought to be dubious.
This step
5. Hong Kong may however press for a commit-
ment to take this action in the last resort,
and we have acknowledged that HMG has been
considering such a step. However, this was
before Ministers decided to eliminate virtual-
ly all textiles from the UK scheme.
means that only about a quarter of South
Korea's 14 million exports (1969) to the UK
would qualify for our preferences, and three-
quarters of these preferential items comprise
ores and scrap metal which Hong Kong does not
export. For Taiwan, the figures are similar.
6. Hong Kong will no doubt argue the great
export potential of those countries in other
sectors covered by the GS, but it is question-
able whether HMG would wish to exclude these
countries, to whom we export twice the amounts
they export to us. It is also possible that
Hong Kong would press for the exclusion of
other rivals such as Israel or Mexico. The
latter would certainly lead to acrimony in
UNCT D with the Group of 77.
Iine to take
7. We should therefore inform the Hong Kong
officials that we have met their desires via
product exclusions
textiles from our scheme.
exports in our market
the removal of most
Should Hong Kong
suffer
as the result of
the GPS, this aspect can be taken care of in
the annual reviews of the GPS, which cater for
the protection of countries enjoying existing
preferences, or possibly by the use of safe-
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