TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 73

GPS 500

IMMEDIATE

CYPHER/CAT A

FM HONG KONG 080925Z

CONFIDENTIAL

inter & resube's

CONFIDENTIAL

TO IMMEDIATE FCO TELNO 299 OF 8 MARCH, 1974.

FOR DTI.

YOUR TELEGRAM NO CREDA 13.

COMMISSION PROPOSALS FOR GSP.

LAST

REF.

(29)

FOR LAM FROM JORDAN,

NEXT

REF

6/5985/1

маса

RECEIVED IN

REGISTRY No. 51

12 MAR 1974

HKR 6/598/1

33

Discussed with Au Armand the Youde

Аблайт

AS YOU KNOW, WE BELIEVE THAT THE PRINCIPAL EFFECT OF A SCHEME

LIKE THE COMMUNITY'S IS NOT SO MUCH TO GENERATE NEW TRADE AS TO

DIVERT TRADE TO BENEFICIARY COUNTRIES. ANY DISCRIMINATORY ARRANGEMENT, EXCLUSION OR A SPECIAL LOW BUTOIR, IS LIKELY TO HAVE SOME SUCH EFFECT SO LONG AS THE DISCRIMINATION DOES NOT APPLY

TO ONE'S COMPETITORS.

2. I ASSUME THAT TRAN'S PROPOSALS WOULD APPLY TO THE SCHEME

AS A WHOLE. WE WOULD WELCOME (A) AND (B) BUT OUR FEAR IS THAT TO SECURE THEM, (C), WHICH, AS IT STANDS, LOOKS FAIRLY REASONABLE, WOULD HAVE TO BE STRENGTHENED.

3. ANY MORE RESTRICTIVE FORMULA FOR DEALING WITH THE 'HIGHLY

COMPEITIVE' COULD WORK TO OUR SERIOUS DISADVANTAGE AND NOT ONLY

IN TEXTILES. FOR INSTANCE, WHILE THE INCLUSION OF HONG KONG'S TEXTILES AND FOOTWEAR WITH A GENERAL PROVISION THAT A CERTAIN LEVEL

OF PERFORMANCE OVER REPEAT OVER THE BUTO IR WOULD LEAD TO EXCLUSION FROM PREFERENCES, PRODUCT BY PRODUCT, MIGHT ELIMNATE SOME OF OUR COMPETITORS AND US IN CERTAIN TEXTILE ITEMS, IT COULD QUICKLY

CAUSE US CONSIDERABLE DAMAGE. IN THE NON-TEXTILE FIELD

گے

(THE OTHER 50 PER CENT OF OUR TRADE). THE HIGHER THE LEVEL USED, THE MORE LIKELY IT WOULD BE THAT HONG KONG ALONE WOULD BE ELIMINATED.

CONFIDENTIAL

/ 44.