TNAG-0298-FCO40-334-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 8

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CONFIDENTIAL

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То : Director of Commerce and Industry, Hong Kong,

From:

Counsellor (Hong Kong Affairs), Geneva

Memorandum No. 58

File No. GVA/10/8/1

Date: 16 April, 1971

27

EEC Preferences Scheme

I have now had a chance to go through the Commission document SEC (71)1000 final of 15 March, a copy of which was sent to me by Mr. Kemmis under cover of his letter to Mr. Dorward of 31 March. No doubt you will also have been giving close study to this document and its appendices and most of the points made below will probably already have been noted by you.

2. As Mr. Kemmis points out there are a number of changes compared with our previous understanding of the EEC's intentions. It is not clear to what extent all of these changes, as proposed by the Commission, will eventually be adopted by the Council of Ministers, but I presume most, if not all of them, will be. You will note that the Commission has still got to submit everything again in a draft Regulation for further consideration by the Council.

3. I will try to list seriatim the main changes or clarifications as I see them (I may miss some but nothing of importance, I hope):

(1) All dependent territories and not just Hong Kong

excluded for textiles and shoes (page 8)

(2) Beneficiaries to be limited to the 77 and

dependent territories for the moment, with the possibility of additions after consultations in OECD (but recalculation of ceilings, butoirs etc.. would then be needed) (page 8).

(3) Scheme to come into force on 1 July, 1971

(since confirmed by the Council)(page 10).

(4) Processed agricultural products in the positive

list (Annex 1) to be included without ceilings but with only partial cuts and with a safeguard clause (pages 11-12).

(5) Raw materials and six processed agricultural

products in BN Chapters 25-99 (Annexes II and III) to be excluded (page 14).

(6) For certain textile products (noted in Annex VI)

the ceilings will only include the basic amount and not the 5% supplementary amount (page 15).

CONFIDENTIAL

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