TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 95

Reference.

CONFIDENTIAL

233

1

RECEIVED IN REGISTRY No.51 250033971

NKKCG

Mr Mason (ID)

CC:

Cir S Tomlinson Mr Halc (Commodities) Mr Karshall (PAD)

Laird (HKD)

Mr Wilford

EMC AND TEXTILES: BRIT FOR THE SECRETARY OF STATE FOR THE AB MUNTING ON 25 OCTOBIR

1.

I would agree that in the circumstances we have no alternativo but to accept the proposals in paragraph 14 of the DTI paper and wo would therefore concur in the recommendations in paragraph 12, of the draft brief. But I think that the brief (and the DTI paper) seriously understates the reactions in developing Commonwealth countries, and particularly in India, when our policy becomes known. The Indians are likely to accuse us of a breach of faith in that they will find themselves back in a situation where quotas and tariffs apply, where their quota will be greatly ruduced and no longer duty free. And this accusation will have some force if we cannot demonstrate that we have endeavoured to accommodate them. We have assured them on a number of occasions that their fears were groundless, most recently in the bilateral discussions on cotton, toxlilcs in May this year. We consider therefore that the statement given to the Commission should make a strong case for special treatment for the Asian Commonwealth countries particularly in the light of the undertaking given by the Community and the candidates to those countries.

2. From the point of view of our relations with the Asian Commonwealth I am not persuaded that we should not at least ask for a derogation from the Article 4 agreements. Indeed we would see some advantage from the political point of view in having a public row, even if we lost it. It would serve to convince the developing countries that we had done our best for them. Koreover,

I believe that those members of the EC,e.g. Germany, which as members of the India Consortium have a major stake in Indian development, might well be more disposed to make concessions than is indicated in the TI paper.

ACK

I J M Sutherland

South Asian Department

22 October 1971

COIVIDLYITAL

DD 096639 140609 300M 7/71 GM 3643,2