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the Community's reaction would be if it were put to them but it would clearly be an important issue for the Community as a whole and, seen from Brussels at least, there would seem to be little chance that they would agree ot it.
6.
Referring to the phrase in the petition that it was understood that it was the British Government's "intention" to move towards the Community G S P he pointed out that it was an obligation of membership just as was the adoption of the G E T, with which it would have to be phased. It had been possible to get some delay but that was all.
7. Mr Willians and other Members of the Committee said that it seemed to them that Hong Kong was being discriminated against as a developed country simply because it was an efficient producing country and not because of per capita wealth indeed there was still a great deal of poverty in Hong Kongand on this account it should be regarded as developing.
8. The G S P arrangement linked with quotas in the EEC was not, in any case, giving money to the exporting countries. Since there could not be any certainty when the over all quota would be fulfilled the importers were quoting at the duty paid rates in all cases and thus benefitting from any exemption from duty as a bonus. Importers hoping for such a bonus were tending to place all their orders with countries qualifying for the G S P and diverting trade away from Hong Kong.
9.
This discrimination might be much reduced if the quotas could be applied at the source of export. It would then be possible for the exporting country to get some direct benefit and would limit the extent to which the importers would turn to the newly developing producers.
10. The Committee agreed that Hong Kong was still doing well in the European markets despite the G S P. This was said to be partly due to the attractions of Hong Kong's extensive experience in buying raw materials, its established sources of supply, its reliability on delivery dates, flexibility of production and developed salesmanship. European buyers still liked to maintain the established links so far as possible but other countries were beginning to catch up on these points and Hong Kong had to find some way to keep ahead.
11. Mr Denman said that he had taken note of the idea of applying quotas at source but was doubtful about how it would appeal to the EEC if put to them. He asked to what extend Hong Kong manufacturers were actively seeking to develop the European markets. If they could induce a strong preference among the European importers for the Hong Kong products and reduce the fear of Hong Kong as a competitor then it could happen that pressure from within the E E C would cause some re-appraisal of the G S P.
12. Mr Williams said that some success had been achieved in developing a demand for Hong Kong products in Italy and Germany. But they were still trying to persuade the Trade Development Council to set up an office in France which had hitherto seemed a much more difficult nut to crack because of the inward looking attitude of the French.
13. In reply to a question on whether the trend in Europe was towards a more liberal or a less liberal attutude in trading Mr Denman and Mr Goldsmith said that the British Government's objective was to achieve a more liberal approach both in the sense of an increasing community of policy within the Community and a more liberal attitude towards external trade by the Community
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