TNAG-0384-FCO40-430-Trade-relations-between-Hong-Kong-and-the-EEC-1973 — Page 56

CONFIDENTIAL

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HONG KONG AND THE COMMUNITY'S GENERALISED SCHEME OF PREFERENCES.

PROBLEM

1. In 1971 we agreed with the Six during the enlargement

negotiations that Hong Kong should be admitted to the Community's

GSP subject to exclusion of benefits for her textiles and footwear.

This means that from 1 January 1974, when we align with the

Community's GSP, we should discriminate against Hong Kong in favour

of her principal competitors among the developing countries, who do

receive benefits on footwear and textiles. The Hong Kong and

European sides of the Office are unable to agree whether the

question of the exclusion of Hong Kong textiles and footwear should

be re-opened in Brussels.

BACKGROUND

2. On 1 February 1971 Mr Rippon accepted the Community's offer on

Hong Kong which was more satisfactory from our (and Hong Kong's )

point of view than we had at one time feared. The Community offer

was extracted with difficulty. Mr Rippon agreed that the case of

Hong Kong was

settled definitively in the framework of the

enlargement negotiations. However he added that Hong Kong was and

would remain after enlargement a dependent territory of the United

Kingdom and went on: "It follows from this that it must be our

continuing concern to avoid discriminating against Hong Kong in

CONFIDENTIAL

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