TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 40

CONFIDENTIAL

SINCE THE HONG KONG FOOTWEAR AND TEXTILE INDUSTRIES ARE ALREADY SUFFERING FROM THE EXCLUSION OF THEIR PRODUCTS FROM THE COMMUNITY'S SCHEME THE HONG KONG GOVERNMENT HAS NOTED WITH GROWING CONCERN REPORTS THAT THE COMMUNITY IS CONSIDERING FURTHER CHANGES

TO THE SCHEME THAT WOULD REDUCE THE TRADING OPPORTUNITIES FOR THE MORE COMPETITIVE AMONG THE DEVELOPING COUNTRIES.

WHILE THE HONG KONG GOVERNMENT FULLY UNDERSTANDS THE COMMUNITY'S WISH TO ENSURE THAT THE SCHEME PROVIDES ENHANCED TRADING OPPORTU~ NITIES FOR THE LESS DEVELOPED OF THE DEVELOPING COUNTRIES, IT BELIEVES THAT THE EXISTING BUTIOR' ARRANGEMENT ALREADY ENSURES THAT THE MORE COMPETITIVE DEVELOPING COUNTRIES DO NOT OBTAIN A DIS- PROPORTIONATE SHARE OF THE BENEFITS OF THE SCHEME.

IN 1973 THE SCHEME OPERATED BY THE ORIGINAL SIX MEMBERS OF THE COMMUNITY WAS IN RESPECT OF PRODUCTS OTHER THAN TEXTILES WORTH IN TOTAL SOME 1,009 MILLION UNITS OF ACCOUNT. IMPORTS FROM HONG KONG INTO THE SIX UNDER GENERALISED PREFERENCE TOTALLED APPROX 43 MILLION UNITS OF ACCOUNT. IN OTHER WORDS HONG KONG BENEFITED TO THE EXTENT OF ONLY 4.3 PER CENT OF THE TOTAL AMOUNT AVAILABLE, ABOUT 70 PER CENT OF HONG KONG'S EXPORT TRADE TO THE SIX IS IN THE 'SENSITIVE CATEGORIES. IMPORTS FROM HONG KONG INTO THE SIX OF SENSITIVE PRODUCTS UNDER THE SCHEME IN 1973 TOTALLED APPROX 1.1 MILLION UNIT OF ACCOUNT OR ONLY 1.1 PER CENT OF THE TOTAL AMOUNT AVAILABLE,

THESE FIGURES CLEARLY SHOW THAT HONG KONG'S PERFORMANCE UNDER THE SCHEME IS UNREMARKABLE AND WOULD APPEAR TO BELIE ANY SUGGESTION THAT HONG KONG IS IN SUCH A STRONGLY COMPETITIVE POSITION AS TO ENABLE IT TO TAKE A DISPROPORTIONATE SHARE OF TRADE UNDER THE SCHEME.

THE HONG KONG GOVERNMENT HAS ALSO NOTICED A SUGGESTION THAT A BENEFICIARY'S BUTO IR RECORD SHOULD BE USED TO DETERMINE ITS FUTURE OPPORTUNITIES UNDER THE SCHEME. HONG KONG REACHED THE BUTOIR LEVELS FOR 24 CATEGORIES IN 1972 AND FOR 22 CATEGORIES IN 1973. OF THESE, 21 CATEGORIES ARE COMMON TO BOTH YEARS, AND OF THESE 21, 17 VERE SENSITIVE CATEGORIES. IN BOTH YEARS IN THOSE CATEGORIES WHERE HONG KONG REACHED THE BUTOIR, THE TARIFF QUOTA AS A WHOLE WAS NOT FILLED.

/IT SEEMS

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