TNAG-0441-FCO40-506-Visits-of-leading-personalities-of-Hong-Kong-to-UK-1974 — Page 22

CONFIDENTIAL

HONG KONG'S TRADE AND THE EEC GENERALISED SCHEME OF PREFERENCES

1.

In February 1971 we agreed with the Six, during the

enlargement negotiations, that Hong Kong should be

admitted to the Community's GSF, subject to the exclusion

of her textile and footwear exports. As some of

Hong Kong's principal competitors among the developing

countries receive benefits in these categories, we have,

since 1 January 1974, on aligning to the Community's GSP,

been discriminating against Hong Kong. Hong Kong is

concerned about this, both for its own sake, because

of the constitutional implications, and for the precedent

it sets for other importing countries (especially the

United States and Japan) in their Generalised Preference

Schemes.

2. When we accepted this arrangement in 1971 the

Community were told that it would be our continuing

concern to avoid discriminating against Hong Kong in

favour of her principal competitors among the developing

countries. The Hong Kong authorities reminded us of

this last year and put pressure upon us to re-open the

matter with the Community. On 6 November the former

Chancellor of the Duchy of Lancaster said publicly

CONFIDENTIAL

/that