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particularly in textiles. We have been able, by timely
consultations, to reach acceptable restriction agree-
ments, but the difficulties will recur.
Hong Kong has
similar difficulties in their trade with the other
Europeans.
They expect us to defend these interests
from within the Community. But our power to do so is
limited.
5.
These points of friction are largely inescapable.
They also involve the fundamental interests of this
country, which we cannot abandon. But in other matters
we do have some freedom of choice. One of the questions
under negotiation with our European partners is our own
alignment with the Community's system of Generalised
Preferences (GSP). Textiles and footwear from Hong Kong
are excluded from this system; but ports from some of
their main competitors are included. It will cost us
something in Community terms to maintain that we cannot
ourselves discriminate against our own dependent
territory.
Nevertheless I believe we must try to
persuade our European partners not to press this upon
us.
6. Another example is air traffic rights. We control
landing rights at Hong Kong airport, greatly to BOAC's
benefit in world wide negotiations. But Hong Kong
built and maintain the airport with their own money.
To protect BOAC's revenues world wide, we are still
refusing Hong Kong's request, made for their own
political reasons, that the Scandinavian airline SAS
should be allowed a service to Hong Kong. This is
greatly resented there.
17.
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