TNAG-0464-FCO40-529-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 13

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4. 1 SHALL RE-PHRASE SOME OF WHAT I SAID IN MY STATEMENT ON

RETURN HERE ABOUT PUTTING CUR VIEWS TO YOU AND THE UNDERTAKING

TO CONVEY THEM TO MINISTERS.

5. I HOPE THAT. I SHALL BE ABLE TO GO ON TO SAY THAT YOU ARE

SEEKING SOMETHING MORE THAN CONFIRMATION OF THE COMMISSION'S

PROPOSAL TO INCLUDE OUR FOOTWEAR, WHICH, THOUGH WE WILL WELCOME IT, WILL ASSIST ONLY A VERY SMALL SECTOR HERE. THE ONLY REAL

SUBSTANTIAL IMPROVEMENT FOR US WOULD BE SOME RELAXATION ON

TEXTILES. HOWEVER MUCH THE COMMISSION'S COMPROMISE PROPOSALS

IMPROVE THE SCHEME (FROM OUR POINT OF VIEW) THE FACT REMAINS

THAT UNLESS THERE ARE CHANGES ON FOOTWEAR AND TEXTILES WE

SHALL BE WORSE CFF IN 1975 THAN WE ARE IN 1974.

6. I HOPE WE MADE IT CLEAR IN LONDON THAT WE CANNOT SEE TRANSFER

FROM THE SENSITIVE LIST (1.E. IN PRACTICE THE ABANDONMENT OF THE

'KEY') AS IN ANY WAY BENEFICIAL TO THE INTERESTS OF ANY

BENEFICIARY THAT CAN ACTUALLY EXPORT WHAT THE E E C REQUIRES SO LONG AS THE SPECIAL BUTORS, FREEZING OF ACCESS, COLUMN 3 AND ALL

THAT GO WITH IT ARE ALSO INCLUDED. OUR EXPERIENCE SHOWS THAT THE

UNDER-UTILISATION OF TARIFF QUOTAS IS NOT (REPEAT NOT) DUE TO THE KEY: WE AND OTHERS HAVE EASILY REACHED BUTOIRS DESPITE IT.

AFTER ALL IN MANY CASES THE 'KEY' SHARE FOR SOME INDIVIDUAL

MEMBER STATES IS HIGHER THAN THE BUTOIR FOR THE COMMUNITY AS A

WHOLE. THE NEW DISCRIMINATORY ARRANGEMENTS WILL NOT LEAD TO

'EQUITABLE BENEFIT-SHARING AMONG PREFERENCE-RECEIVING COUNTRIES':

THAT DEPENDS ON ABILITY TO SUPPLY WHAT THE MARKET WANTS, THEY WILL

JUST REDUCE THE SHARE OF THOSE WHO CAN SUPPLY.

7. IN SHORT WE BELIEVE THAT THE 'LIBERALISATION IS AN ILLUSION.

THE ONLY BENEFICIARIES LIKELY TO HAVE THE ABILITY IN 1975 TO

TAKE ADVANTAGE OF IT ARE TO BE SINGLED OUT FOR RE-ADJUSTMENT''

BEFORE THE PROPOSALS COME INTO FORCE.

8. OR TO PUT THIS ANOTHER WAY: THESE PROPOSALS WILL RESULT IN

AN EVEN LOWER OVERALL UTILISATION OF TARIFF-QUOTAS IN 1975 THAN

IN 1974.

MACLEHOSE FILES:

HKIOD ()

SIR D. WATSON

EID

MR. MALE

TRED

MR. BUTLER

ECONOMISTS D MR. MARSHALL

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