TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 78

CODE 18-7I

MR LAM CREL

Room 448

Victoria Street

Reference......................................

244/0

cc Miss Lackey

CRE3

Mr Herzig.

CRE2

Mr Clark

CREL

TPD FCO

HONG KONG:

GENERALISED PREFERENCES SCHELE

Mr Perceval Mr Laird

HKD FCO

Hong Kong telegram number 806 reports that the EEC is seeking to exclude Hong Kong from its scheme in 1972 in' respect of twelve tariff positions. Brussels telegram number 370 says that this is a formal but confidential proposal that Hong Kong should agree to exclusion and it is suggested that bilateral talks should be requested.

2

I am afraid that the SEC can claim that they have given Hong Kong and us fair warning that the exclusion of these Hong Kong products would be sought at some time. I have checked the list of tariff headings against the lists of Hong Kong products attached to the report of the Community's Working Group on Hong Kong, submitted to the Committee of Permanent Representatives and enclosed with Mr Hannay's letter to Mr Denman of 17 December 1970 (flagged below). I have also looked at the statements made by both sides in the Brussels Conference regarding the conditions on which the EEC agree to include Hong Kong in their scheme and which constituted the basis of our agreement to the treatment Hong Kong would receive in the enlarged Community.

3 Of the twelve items in the telegram, the following six were listed as "sensitive products from Hong Kong that appear unlikely to meet the origin rules":

Table 3.

85.15 90.05

A III

90.07 BX A

D

90.08

A

90.12

92.13

A

4.

On 26 January 1971, the Community stated (CODEL 45) that the Community:

"envisaged that not be able to not fulfil the of the scheme.

a certain number of products would benefit from preferences if they did origin rules envisaged in the framework The Community Delegation stated again that a certain number of products coming from Hong Kong did not seem to fulfil these conditions"

5 At the Ministerial meeting on 2 February, the Community stated (CODEL 71) that the Community had offered to include Hong Kong but they reiterated the various conditions about sensitive products, including their statement of 26 January. In reply, the Chancellor of the Duchy of Lancaster (CODEL 72) noted what the Community had said about origin requirements and he added:

"I would be grateful for your confirmation that these

rules of origin will be applied on a non-discriminatory basis....."

and that

•

"It might be useful... nearer the time of implementation

if there could be technical contacts between our officials and the Commission to throw further light on the practical implementation of these rules".