TNAG-0385-FCO40-431-Trade-relations-between-Hong-Kong-and-the-EEC-1974 — Page 164

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GEN 131 (73) name CONFIDENTIAL

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GENERALISED SCHEME OF PREFERENCES HKK 6/3.

CONFIDENTIAL

The Committee considered a draft paper on the Community's Gereralised

Scheme of Preferences (GSP) in 1974 otroulated under cover of Mr O'Neill's

letter of 8 Octuber to Mr E J G Smith,

1374)

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MR LAM said that we were obliged under the Treaty of Accession to align to the Community's GSP from 1 Jemary 1974 and it would

not be possible to continue our existing G6P thereafter without

a formal derogation from our Treaty commitment to which other Member States would be most unlikely to agree. Although the arrangements to which we would align would be less liberal than we would wish, in some respects it

would be possible to present the new Community scheme to the developing

countries as an improvement on its predecessor. For example, quotas would

be increased because of the enlargement of the Community; we had secured

modest reductions in the lists of sensitive and semi-consitive items;

some processed agricultural products would be brought within the scope of

the scheme; a few butoirs would be increased; and arrangements were likely

under which a proportion of the total Community quotas would be hela in

reserve for the use of Member States which exhausted their individual

quota shares. Presentationally we could emphasise that these improvements

were only a first step and that we would bo pressing for further progress in subsequent years. Our objective in the remaining negotiations within

the Community would be to secure improved arrangements for plywood, canned

pineapple, soluble coffee, cocoa butter and textiles; and to resist pressure by the French and others to reduce increases in quotas in respect of certain

products of particular interest to Hong Kong,

In discussion the following main points were made

2. While in theory it would be open to us to hold up the proposed

new Community GSP by refusing to agree to it, this would be virtually

impossible on political grounds, and in practice we had little

alternative but to go along with a scheme on the lines currently under

discussion.

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CONFIDENTIAL

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