TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 38

ANNEX F

Fw/39

RPS

1748

PRIORITY

CYPHER/CAT A

FM HONG KONG 290922Z

CONFIDENTIAL NEUTRAL/

CONFIDENTIAL

TO PRIORITY F C O TELNO 336 OF 29TH MARCH, 1974. INFO PRIORITY UKREP BRUSSELS, BRUSSELS (FOR DODGE) AND HONGAID.

M.I.P.T.

MEMORANDUM.

HER MAJESTY'S GOVERNMENT IN THE UNITED KINGDOM HAS ALREADY STATED IN THE COUNCIL OF MINISTERS OF THE EUROPEAN ECONOMIC COMMUNITY ITS DETERMINATION TO PRESS RESOLUTELY FOR THE INCLUSION OF HONG KONG3 TEXTILES AND FOOTWEAR IN THE COMMUNITY'S GENERALISED SCHEME OF PREFERENCES FROM 1975.

THE HONG KONG GOVERNMENT HOPES THAT IT WILL NOT BE THOUGHT INAPPROPRIATE THAT IT SHOULD DRAW ATTENTION TO CERTAIN FACTS AND FIGURES, THE IMPLICATIONS OF WHICH MAY BE REVELANT TO CONSIDERATION OF HONG KONG'S STATUS, BOTH PRESENT AND FUTURE, IN RELATION TO THE COMMUNITY'S SCHEME.

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.

SINCE THAT TIME THE HONG KONG FOOTWEAR INDUSTRY HAS DECLINED SHARPLY AND EXPORTS OF HONG KONG TEXTILES TO THE EEC HAVE FALLEN MARKEDLY.

MADE.

A SURVEY OF THE HONG KONG FOOTWEAR INDUSTRY HAS RECENTLY BEEN

THIS SHOWS THAT THE INDUSTRY IS FRAGMENTED AND UNDER- CAPITALISED AND THAT BOTH PRODUCTION AND EXPORTS HAVE DROPPED SHARPLY IN RECENT YEARS.

THE HONG KONG GOVERNMENT BELIEVES THAT THE CONDITION OF THIS INDUSTRY DOES NOT WARRANT DISCRIMINATION, BUT RATHER THAT THE HONG KONG FOOTWEAR INDUSTRY HAS ALL THE CHARACTERISTICS OF THE KIND OF INDUSTRY WHICH THE GENERALISED SCHEMES OF PREFERENCE ARE GENERALLY DESIGNED TO ASSIST.

/WHILE IT IS

CONFIDENTIAL