TNAG-0385-FCO40-431-Trade-relations-between-Hong-Kong-and-the-EEC-1974 — Page 177

CONFIDENTIAL

24

them on the day of alignment.

The Governor has warned that the

Prime Minister may face criticism on this point during his visit to Hong Kong. But to reopen this question now would create difficulties for us in the Community, in the UK and with the independent Commonwealth countries. Our partners would argue that the question of Hong Kong's admission to the GSP was definitively settled in 1971. Moreover, the Community's original agreement

to admit Hong Kong to their GSP, less textiles and footwear, was only obtained with difficulty. Some of our partners are showing

At resistance to other proposals for improvements in the GSP.

home, critics of our European policy would be likely to argue that if we could reopen the terms of our entry on Hong Kong's

Other Commonwealth behalf, we could also do so for ourselves. countries, such as India, would contrast our insistence that we have no alternative but to raise our tariffs against them, with

our efforts for Hong Kong.

8.

I reluctantly conclude that if we were now to try and persuade our partners to renegotiate the question of Hong Kong Our best course, textiles and footwear we should be defeated. accordingly, will be to follow the accepted Community procedures and wait until the 1974 annual review (which will start in the summer of 1974 and reach conclusions in November 1974) before we

We should at least can try to achieve improvements for Hong Kong. have more evidence then on which to base our claim.

9. This decision will disappoint Hong Kong and in order to minimise the political damage there, it will be necessary for us to state now, firmly and in full, Hong Kong's case to our /partners

CONFIDENTIAL