TNAG-0464-FCO40-529-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 65

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The Hong Kong Government questions the position of normal

beneficiaries subject to a 50 butoir at present but who could later

become super competitive. If the latter are allowed to maintain this

absolute level of trade this would be most unfair. The line to take

in reply could be that the Community's scheme runs for one year at

a time and we shall renew this problem in 1975. More important, the

prospect: of any country suddenly absorbing 50% of the quota is not

very great.

3 Hong Kong also objects to the proposal to grant a measure of

regional accumulation to recognised groupings among developing countries

including the ASEAN Group. Hong Kong objects because she could not

profit from this. We favour the Commission's proposals as encouraging

a measure of regional integration among developing countries, an obje-

ctive to which we lend support in UNCTAD.

Frogress of Regotiations so far

9 So far we have welcomed the positive elements of the Commission's

proposals and made clear our dislike of the restrictive aspects. The

proposals have provoked wide disagreement in the Working Group.

great many reserves have been expressed on individual items proposed

for removal from the "sensitive" list. Most Member States accept the

super competitive concept though some, in particular the Italians and

Belgians would like then further tightened while the Dutch would like

to exclude from GSF completely developing countries capable of com-

peting on world markets. As indicated, the Commission is working on

a modification of its proposals.