TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 12

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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. 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. On 6 November the then Chancellor of

the Duchy of Lancaster said publicly that we would be pressing

"most resolutely" in the context of the 1974 GSP review for the

inclusion of Hong Kong's textiles and footwear in the Community

scheme from 1975 onwards.

FRESENT SITUATION

4.

Review

When this year's GSF begins in earnest we shall press

for Hong Kong's textiles and footwear exports to be included in

the Scheme from 1975 onwards. It is likely that the Secretary

of State will say something about this in his next statement on

renegotiation to the Council of Ministers on 4 June. We believe,

however, that it is unrealistic to expect to secure all we want

in one go

The issue is further complicated by the fact that

Hong Kong benefits quite considerably from EEC GSP benefits on

other items in the industrial sector. The new inclination

within the EEC Commission to improve the GSP in favour of the

least developed among the lesser developed nations could

restrict or, at best, freeze benefits for Hong Kong in this

The Hong Kong Government clearly do not wish to lose

sector.

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