TNAG-0463-FCO40-528-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 22

Department of Trade and Industry

Chemicals & Textiles Division

29 JUL 974

120

Telex 263171

Millbank Tower Millbank London SW1

Telegrams Advantage London SW1

Telephone 01-XXX 834 4422

M A Goodfellow Esq

Your reference

HKIOD

Foreign & Commonwealth Office Room 245

King Charles Street

London SW1

Our reference

Date

Дети Поливи

21 June 1974

EEC Gsl

I have fold

andis Surbing

کمان

HONG KONG TEXTILE ARRANGEMENTS

کمل

Sold ther. hodge Un

Lodge

this is dis furt

we could!

alory with these senfuments arx.? Do I will batte on

One of 226-511

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Thank you for the copy of the US/Hong Kong Memorandum of Understanding. I hope that this does not become available to other EEC Member States before we complete the mandate for the negotiations with Hong Kong, because it will merely serve to reinforce their view that Hong Kong should be comprehensively restricted.

In addition to a comprehensive coverage, there is some indication that other Member States will seek to reduce the level of imports presumably through Article 3 of the GATT MFA7. For example, at the meeting of the Ad Hoc Textile Group on 19 June, the French delegate reiterated his view that Hong Kong had been treated too well in the past; that comparable treatment for other supplying countries would mean the destruction of the Community textile industry; and that the French want Hong Kong to be treated differently from other S E Asian countries by reducing Hong Kong's "export possibilities". On this occasion, in order to prevent diversion of the mainstream of our discussion on burden sharing, I restricted myself to saying that I would comment on Hong Kong at the appropriate moment, but, in giving support to a new compromise proposal on burden sharing, I said (without contradiction) that the formula would be applicable to all supplying countries. Nevertheless, I would not be surprised if a further attempt were made to exclude Hong Kong from the provisions of burden sharing, and it is certain that, both in terms of coverage and quota levels, certain Member States (notably France and Germany) will seek to be as restrictive as possible.

Copies go to Roberts (CRE2 DoT) and Bown (TRED FCO)

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