TNAG-0337-FCO40-373-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster--Sir-Geoff-1972 — Page 56

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2.

3.

Preference.

In textiles, wool is duty-free, but man-made

fibres, silk and (since 1 January 1972) cotton are all

dutiable at about 85% of the mfn rate. Hong Kong is

also a beneficiary under the UK's generalised preference

scheme, but this excludes most textiles.

4.

In the accession negotiations the Community ruled out

associate status for Hong Kong. She will, of course,

benefit from the transitional arrangements negotiated

by the UK: this will help her to adjust to the new

situation. But it is mainly to the GPS that Hong Kong

must look to mitigate the consequences of our entry.

We will be aligning to the enlarged EEC GPS scheme on

1 January 1974. Although it is true that Hong Kong will

have to share the benefits of this scheme in our market

with other developing countries it is unlikely that dong

Kong would have secured inclusion in the existing 300

scheme, and thus access on a preferential basis to hone

important markets which she had not previously enjoyed,

had it not been for our impending entry into the EEC.

The loss of Commonwealth preference margins in the UK arrkeb

as a result of our accession to the EEC is partly

academic. Our own GPS scheme which covers, apart from

textiles, the vast majority of Hong Kong's exports to

our market, in any event involved loss of Commonwealth

preference margins for Hong Kong.

The inclusion of Hong Kong in the EEC scheme was also

held to be of great importance by the Colony because of

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