TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 57

doing so and accordingly on 6 November the former

Chanc lor of the Duchy of Lancaster put the Community

on notice that we would be pressing "most resolutely"

for the inclusion of Hong Kong's textiles and footwear

in the Community scheme from 1975 onwards.

4. Hong Kong is also concerned about ideas which the

Commission have recently been ventilating, aimed at

improving access to the GSP for the poorest countries.

They envisage limiting the extent to which the most

should competitive countries, e.g. Hong Kong, en benefit

from the scheme. They are thinking in terms of a two-

tier butoir system under which the most competitive

countries would have a low butoir of around 10 per cent.

These ideas, which are still very much in a preliminary

stage, have been sympathetically received by some of

the Community countries, in particular the Netherlands.

On a personal basis we have said that this does not

seem the right way to tackle the problem and that it would will be best to allow completely duty-free access

without limitation for the poorest countries.

.5./1

5// Hong [N.P.]

Kong's opposition to such ideas is shown clearly in

the attached draft memorandum. The content of this

will be discussed in detail when Mr Jordan calls on

the Department of Trade and the Department of Industry

officials but generally the draft does appear to over-

state Hong Kong's case. In particular, the figures

quoted on Hong Kong's participation in the 1973 scheme

are misleading while the emphasis on the effect of the

exclusion of Hong Kong's textiles and footwear seems

wrongly placed. It is since our alignment to the EEC

scheme that Hong Kong's interests in these fields are

likely to be particularly hit. But it is still too

/early

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