TNAG-0464-FCO40-529-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 14

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RECE REGISTRY No. 51 12 NOV 1974

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TO PRIORITY HONG KONG TELNO 943 DATED 31 OCTOBER INFO UKREP BRUSSELS BRUSSELS (FOR BURGESS) UKMIS GENEVA (FOR DORWOOD) ETC HONG KONG

FOR JORDAN

HONG KONG AND THE GENERALISED SCHEME OF PREFERENCES

1. AS AGREED AT THE LUNCH MR KIDD GAVE ON 24 OCTOBER DURING

YOUR RECENT VISIT, WE HAVE NOW CONSULTED UKREP BRUSSELS, ON

THE BASIS OF THE TEXT YOU LEFT WITH US, ABOUT THE MEMORANDUM

YOU WOULD LIKE TO PUT TO THE EEC COMMISSION. WE GATHER THAT

HONGKONG OFFICIALS HAVE ALSO BEEN IN DIRECT CONTACT WITH

COMMISSION OFFICIALS ON THIS MATTER.

2. UKREP BRUSSELS SEE NO OBJECTION IN PRINCIPLE TO YOUR PUTTING

IN A MEMORANDUM BUT THEY SHARE OUR VIEW THAT IT WOULD BE

INCAUTIOUS TO INCLUDE PARAGRAPH 5, AT LEAST IN ITS PRESENT FORM. THE ELEMENT OF THREAT IS ALL TOO EVIDENT IN THIS PARAGRAPH

AND IN THE VIEW OF UKREP BRUSSELS IT READS AS THOUGH HONGKONG

13 SEEKING TO MAKE A TARIFF PREFERENCE CONTRACTUAL AND THIS

WOULD OF COURSE BE UNACCEPTABLE. IN THE LIGHT OF UKREP BRUSSEL'S VIEW WE CONTINUE TO ADVISE STRONGLY AGAINST THE INCLUSION IN ANY

MEMORANDUM OF ANYTHING MORE OF YOUR PARARGRAPH 5 THAN THE WORDS

''FOR ITS PART THE HONGKONG GOVERNMENT CONFIRMS THAT IT

STANDS READY AT ALL TIMES TO RESPOND TO ANY REQUEST FOR

CONSULTATION''.

3. ON PARAGRAPH 7 YOU WILL RECALL THAT OUR ADVICE WAS THAT WHILE

THE SUGGESTION THAT YOUR UNILATERAL RESTRAINTS SHOULD CONTINUE

INTO 1975 SEEMED VERY REASONABLE IN ORDER TO AVOID DISRUPTING

NORMAL BUSINESS ACTIVITY UNTIL NEW ARRANGEMENTS CAN BE AGREED, IT WOULD BE BETTER TO DEAL WITH THIS POINT SEPARATELY, AND PERHAPS ORALLY, IN ORDER NOT TO RISK REAWAKENING RESENTMENT

IN THE COMMUNITY ABOUT THE WAY THESE RESTRAINTS WERE INTRODUCED

CONFIDENTIAL

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/EARLIER THIS YEAR