TNAG-0445-FCO40-510-Discussions-with-Sir-Murray-MacLehose--Governor-of-Hong-Kong-1974 — Page 156

CONF:

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;

IMMEDIATE

CYPHER CAT/A

FM HONG KONG 110830Z

CONFIDENTIAL (FRAME FILES]

RECEIVED !" REGISTR

13 JUN 1974

AKK 6598/1

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HK

PA

12/05

/1974

TO MEDIATE F C O TELEGRAM NUMBER 642 OF 11 JUNE INFO IMEDIATE BRUSSELS (FOR DODGE) AND UKREP BRUSSELS ROUTINE UKMIS GENEVA (FOR PEARSON) AND HONG KONG GOVERNMENT OFFICE LONDON (FCO PLEASE PASS),

M IP T: EEC AND GSP.

DRAFT TEXT IS AS FOLLOWS:-

LABY

REF.

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''HER MAJESTY'S GOVERNMENT IN THE UNITED KINGDOM HAS RECENTLY STATED IN THE COUNCIL OF MINISTERS OF THE EUROPEAN ECONOMIC COMMUNITY ITS INTENTION TO PRESS FOR A SUBSTANTIAL IMPROVEMENT IN THE POSITION OF HONG KONG IN THE COMMUNITY'S GENERALISED SCHEME

OF PREFERENCES.

2. WHEN HONG KONG WAS INCLUDED IN THE SCHEME THAT WAS INTRODUCED ON 1 JULY 1971, TEXTILES AND FOOTWEAR FROM HONG KONG WERE SPECIFICALLY EXCLUDED FROM THE BENEFITS OF THE SCHEME.

3. SINCE THAT TIME EXPORTS OF HONG KONG TEXTILES AND FOOTWEAR TO THE EEC HAVE FALLEN MARKEDLY AND THE TREND CONTINUES DOWNWARDS.

4. THE DISCRIMINATION HAS CAUSED BUYERS INCREASINGLY TO DIVERT THEIR ORDERS AWAY FROM HONG KONG TO SUPPLIERS IN COUNTRIES WHICH

. ARE BENEFICIARIES UNDER THE SCHEME.

5. ALTHOUGH THE TARIFF QUOTA AND BUTO IR SYSTEMS LIMIT THE EXTENT TO WHICH CERTAIN IMPORTS FROM EACH BENEFICIARY CAN BE ADMITTED FREE OF DUTY, NONETHELESS WHEN ORDERS ARE PLACED IN A BENEFICIARY COUNTRY THERE EXISTS FOR THE IMPORTER THE POSSIBILITY THAT THE GOODS WILL BE ADMITTED FREE OF DUTY. WHEN ORDERS ARE PLACED IN HONG KONG FOR TEXTILES AND FOOTWEAR THIS POSSIBILITY DOES NOT EXIST AND, INDEED, IS REPLACED BY THE CERTAINTY THAT THE FULL DUTY WILL HAVE TO BE PAID ON ALL CONSIGNMENTS.

CONFIDENTIAL

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