CONFIDENTIAL
GROUP IS CONSIDERING IDEAS THAT WOULD MAKE THINGS EVEN WORSE
FÜR HONG KONG THAN THE ORIGINAL COMMISSION PROPOSALS, WHICH
THEMSELVES WERE ALREADY WORSE FOR US THAN THE CURRENT
CONDITIONS. THE PROPOSALS FOR DEALING WITH THE 'SUPER-
COMPETITIVE' COULD SERIOUSLY AFFECT BOTH OUR TRADE AND
FUTURE INVESTMENT. WHETHER TRAN WAS SPEAKING TO DODGE ON
INSTRUCTIONS FROM THE WORKING GROUP OR NOT, WE CAN ONLY
ASSUME THAT DISCUSSION IN THE GROUP HAS CONVINCED HIM THAT
HIS EARLIER PROPOSALS WERE NOT DISCRIMINATORY ENOUGH AND THAT
HIS CHANCE OF REACHING AGREEMENT IN THE WORKING GROUP DEPEND UPON A FURTHER EROSION OF HONG KONG'S POSITION, BY NOT ONLY
INTRODUCING THE SUPER-COMPETITIVE CONCEPT BUT MAKING IT EVEN
MORE DISCRIMINATORY THAN IN THE ORIGINAL COMMISSION PROPOSALS.
6. WHILE THE COMMISSION'S REDUCED BUTOIR PROPOSALS FOR THE
'SUPER-COMPETITIVE' MAY BE PASSED OFF AS NON-DISCRIMINATORY
IN THAT THEY DO NOT NAME COUNTRIES, THEY DO DISCRIMINATE AGAINST ANY BENEFICIARY, THE IMPORTERS OF WHOSE PRODUCTS
HAVE BEEN ABLE TO TAKE ADVANTAGE OF THE SCHEME.
7. IN LONDON IN APRIL WE EXPRESSED CONSIDERABLE DOUBT ABOUT
THE CONCEPT AND NOW THAT WE HAVE THE DETAILS OF IT WE ARE
REALLY ALARMED. WE SEE THE PROPOSALS AS SO INTRICAL TO HONG KONG'S INTERESTS THAT, IF THEY ARE NOT WITHDRAWN OR MODIFIED
I DON'T THINK IT WILL BE POSSIBLE TO CONVINCE PUBLIC OPINION HERE THAT SUBSTANTIAL IMPROVEMENT HAS BEEN OBTAINED FOR HONG
KONG, WHATEVER IS DONE TO REMOVE THE DISCRIMINATION AGAINST OUR FOOTWEAR AND TEXTILES. FOR THE RE-ADJUSTMENTS PROPOSED
WILL NOT ONLY INCREASE THE DISCRIMINATION AGAINST HONG KONG CUT HAVE AN IMMEDIATE AND CONTINUING HARMFUL EFFECT UPON OUR
TRADE. AND OF COURSE THEY WOULD REDUCE WHATEVER ADVANTAGES WERE
SECURED ON TEXTILES AND FOOTWEAR, BECAUSE OUR TRADE IN THESE
WILL ALMOST CERTAINLY BRING THE 'RE-ADJUSTMENT'' PROCESSES
INTO PLAY.
8. BECAUSE OF THE EFFECT OF THESE PROPOSALS (WHICH COULD HAVE
REPERCUSSIONS ON OUR TREATMENT UNDER THE U.S. AND OTHER
SCHEMES) ON OUR TRADE, WE FEEL IT WOULD BE ESSENTIAL FOR US TO INSIST ON A MINIMUM OF QUANTITATIVE RESTRICTION ON OUR
LARGEST EXPORT INDUSTRY
TEXTILES.
2 CONFIDENTIAL
TIAL
19. WE HAVE
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