TNAG-0463-FCO40-528-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 36

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IMPROVEMENTS IN THE TEXTILE SECTOR OF GSP

9. M. Tran envisaged a two--stage evolution for the GSP for textiles. The Commission would make a proposal for the 1975 textile regime by the end of September, and further improvements would be made in 1975 for 1976.

The Scheme for 1975

10. Discrimination against Hong Kong could not be completely eliminated for 1975, but as a first step M. Tran hoped to include Hong Kong on the list of beneficiaries for non-sensitive, non-cotton textiles. Bilateral textile negotiations would almost certainly not be completed by the end of September 1974, so M. Tran thought that the 1974 transitional arrangements would probably be continued into 1975 with a 5 per cent increase in the size of the quota. M. Tran stated that the legal services of the Commission believed that the 1974 Scheme could be instituted for 1975, with Sri Lanka added to the beneficiaries of the cotton textile concessions. The GSP was legally a unilateral system. Under the LTA for cotton textiles, beneficiaries, eg Yugoslavia, were often not members of the IA. M. Tran believed that a similar system could be the model for the 1976 GSP.

11. The Department of Industry asked whether any changes would be proposed in the coverage of R/3505/74 (the "general" list containing 77 items, mostly non-sensitive, but with a dozen sensitive textile products on which M. Tran wants to grant Hong Kong preferences in 1975): some items on this list could become very sensitive for industry throughout the Community if Hong Kong were introduced.

12. M. Tran hoped that some alterations in coverage would be possible in 1975, including transfer of some sensitive items to this list, where they would be treated as semi-sensitive. He would like to eliminate ceilings, but it would be difficult to include Hong Kong without a special arrangement.

The butoir could perhaps be set at 20 per cent.

The Scheme for 1976

13. M. Tran envisaged a link between the membership of the MFA and the membership of the beneficiaries for the textiles scheme. would be two kinds of members:

(i) Members who would conclude a bilateral agreement

with the EEC (eg Yugoslavia)

(ii) Members who would agree to self-limitation in the

framework of the IFA.

There

Where only small amounts of trade were involved, an exchange of letters committing the country concerned to later negotiations for a self-limitation agreement or a bilateral agreement would be sufficient to secure the country preferential treatment.