TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 74

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4. SO FAR AS THE 'HONG KONG PROBLEM' IS CONCERNED, I AM STILL INCI NED TO THINK THAT THE BEST LINE IS THAT 'TEXTILES ARE A SPECIAL CASE AS I SUGGESTED IN PARAGRAPH 5 IF MY LETTER TO BUTLER OF 5 FEBRUARY: THE UNIQUE NATURE OF TEXTILE TRADE PROBLEMS, RE-RECOGNISED ONLY RECENTLY IN THE NEW MTA ETC., SHOULD BE REFLECTED IN THE EEC GSP. IN OTHER WORDS, ACCEPT (A), (B) AND (C) FOR THE SCHEME GENERALLY BUT IF NECESSARY APPLY SPECIAL MORE RESTRICTIVE RULES TO TEXTILES, AS ARE ALREADY APPLIED TO COTTON TYPE TEXTILES UNDER THE EXISTING SCHEME. YOU COULD PERHAPS TAKE THE LINE THAT, ALTHOUGH IT SEEMS ILLOGICAL TO GRANT PREFERENCES ON PRODUCTS WHICH THE MTA RECOGNISES AS POTENTIALLY DISRUPTIVE, YOU RECOGNISE THE POLITICAL NEED TO GRANT THE PREFERENCES THAT THE DEVELOPING COUNTRIES HAVE SOUGHT, BUT IT IS NECESSARY THAT THE SCHEME SHOULD TAKE ACCOUNT OF THE POTENTIAL DISRUPTION BEING INCREASED BY PREFERENTIAL ENTRY. IF SOME SUCH SAFEGUARD MECHANISM WERE AGREED, THIS WOULD SURELY WEAKEN THE CASE FOR CONTINUED EXCLUSION OF HONG KONG'S TEXTILES. (I DON'T THINK ANY SORT OF CASE CAN BE MADE FOR DISCRIMINATION AGAINST HONG KONG'S FOOTWEAR).

5. IT SEEMS TO ME THAT REPRESENTATIONS BY YOU ON OUR BEHALF WOULD HAVE A MUCH BETTER CHANCE OF SUCCESS THEN THAN IF YOU WERE TO TAKE UP THE HONG KONG CASE SEPARATELY AND IN ADVANCE OF AGREEMENT ON AT LEAST THE OUTLINE OF A SOLUTION TO THE GENERAL PROBLEM.

FCO PASS COPY TO HONG KONG GOVERNMENT OFFICE LONDON

MACLEHOSE

FILES

EID

HKIOD

FRD

TRED

MR WRIGHT

MR WILVORD MR YOUDE MR BUTLER

MR LAM

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CRE 1 DTI