TNAG-0298-FCO40-334-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 129

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CONFIDENT IAL

c) A matter of considerable importance to

HMG is the inclusion of Hong Kong in the

US preferences scheme. The territory's

economic and hence political stability

are entirely dependent on her export

trade, and this in turn depends principal-

ly on the American market where the GPS

threatens to be a major obstacle.

Kong exports especially sensitive to the

USA

Hong

textiles and shoes are excluded

→

from the American scheme in any case, so

there is no justification for the exclu-

sion of Hong Kong tout court.. Nor is

there a burden-sharing argument against

the territory, as the other major donors,

will be including Hong Kong in similar

fashion. The EEC have already accepted

!

Hong Kong as a beneficiary and we have

reason to believe, that the Japanese have

decided in principle to follow suit.

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