TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 34

ANNEX C

(w/39)

CONCERN OVER DISCRIMINATION AGAINST HONG KONG IN JAPAN'S GSP SCHEME

Hong Kong became a beneficiary under phase II of the Japanese GSP, but an exclusion list comprising 96 items and amounting to 60% of Hong Kong's exports to Japan, was applied solely to Hong Kong. Following this discrimination against the territory there has been a significant increase in the exports to Japan of her competitors (but much of this must have been over the tariff, after the duty quotas were exhausted). Representations have been made to the Japanese Government by the Hong Kong Government and HMG. On 1 June 1973, Japan agreed to reduce the items excluded to 12, but these items still account for 32% of Hong Kong's domestic exports to Japan,

Further representations were made. Japan has just agreed to remove a further 6 itema from the exclusion list with effect from 1 April 1974. From that date the exclusions will cover travel goods, artificial flowers, jewellery, toys and some footwear. Hong Kong still considers the Japanese scheme to be discriminatory and will continue to press for improvements. The Territory's constant fear is that other countries eg USA, might use the Japanese scheme as a reason for adopting some measure of discrimination against Hong Kong in their schemes.