TNAG-0377-FCO40-423-Defence-and-Oversea-Policy-Committee-review-of-UK-relations--1973 — Page 39

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HONG KONG AND THE EEC GENERALISED SCHEME OF PREFERENCES

3.

In 1971 the Community agreed with us to admit

Hong Kong to their GSP, except for textiles and

footwear. Exports of these items from some of Hong

Kong's major competitors among the developing

countries are, however, included in the Community's

GSP. In particular the Philippines, Thailand and

Yugoslavia were given preferences on cotton textiles

later than the 1971 negotiations. We shall align

with the Community's scheme on 1 January, immediately

before the Prime Minister's visit. We shall then

be seen to discriminate against important exports from

our own colony. Hong Kong are concerned about this,

for its own sake, and because of the bad example to

other importers like Japan and the USA.

4.

The Governor advised that if the Community

would not agree to a change, we should at least be

seen to have tried. But we judged that there was no "The Chorrector of the Duchy

chance of success. He therefore made and published

a statement to the Council of Ministers on 6 November,

that we could no longer accept discrimination against

Hong Kong, and would press most resolutely for a

change during the Annual Review in the autumn of 1974.

We have urged the Hong Kong Government to welcome

this as a success, in the interest of our bilateral

relations and because this is their best tactic with

the Japanese and Americans. They have gone along with

this. But the business community in Hong Kong is

impressed and will probably question the Prime

Minister closely.

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5.

The best answer is to reaffirm our determination