TNAG-0462-FCO40-527-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 78

30

CONFIDENTIAL

Foreign and Commonwealth Office

RECEIVED IN REGISTRY No. 1

London SW1

- 6 MAR 1974T

Telephone 01-

HKK6/5%,&

JB Ingram Esq

CRE1

Dept. of Trade and Industry

1 Victoria St

SW1

Your reference

Our reference

Por Stunt PR JPt. spant.

Date

5 March 1974

4/5

Dear Ingram,

GENERALISED SCHEME OF PREFERENCES, HONG KONG

LAST

127

If

R

32

Thank you for your letter of 19 February. I am relieved that your meaning was not as I feared.

1.

127

2.

We can now get on with the more constructive question of how to fulfil the Chancellor of the Duchy's undertaking on Hong Kong. On this I have seen Martin Lam's telegram Creda 13 to David Jordan in fong Kong. (Incidentally I suggest it would be better to address the Government of Hong Kong direct rather than through the British Trade Commission, to whom the telegram was addressed. This is a small point but the Hong Kong Government do not regard the Trade Commission as an intermediary with HMG, nor would we wish to encourage them to do so.) The point I want to make however is that while I think it is quite possible that Jordan will reject Tran's proposal (c) as providing insufficient protection for Hong Kong in current world market conditions, I would expect this rejection, if he makes it, to be part of the normal Hong Kong tactic of asking for the maximum, rather than a final judgment on the idea.

3.

It is not for me to comment on the desirability of Tran's proposal on general grounds of trade policy, but in the context of our relations with Hong Kong, if their textiles and footwear were admitted to the Community's GSP on this basis, along with other beneficiaries, then the main political objection of discrimination against our colony would be removed. From the political point of view therefore there would be much to be said for the idea, if it proved to be the only way of persuading the Community to extend the GSP to Hong Kong's Lextiles and footwear.

On the question of timing, I spoke at Sunningdale last week to Maltzahn, Principal Adviser in the Directorate General for Industrial and Technological Affairs in the Commission. He told me, with what authority I do not know, that while the idea of restricted butoirs for "highly competitive" developing countries was attractive to the Comission, he did not believe there was much chance that it would be adopted by the Community as a whole in the 1974 Review. Indeed he suggested that this was a long term scheme and that the Commission would not press it this year. This seems to conflict with what Tran has been suggesting, and I do not have sufficient knowledge to resolve the

/discrepancy.