TNAG-0464-FCO40-529-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 72

RES PRICTED

SEE THE ITEMS CONCERNED INCLUDED IN THE SCHEME AS SOON AS POSSIBLE. AMONG THE OILS, WE ATTACII PARTICULAR IMPORTANCE TO GENEROUS CONCESSIONS ON PALM OIL. IN ANY DETAILED DISCUSSION ON THIS SECTOR

OF THE COMMISSION'S PROPOSALS YOU SHOULD SAY THAT THEY WILL NEE

REVISION BECAUSE IN THEIR PRESENT FORM THE PREFERENCES CAN BE

ERODED IF PRICES FALL. THE PROPOSALS SHOULD BE AMENDED TO OVERCOME

THIS PROBLEM. WE SEE OBJECTIONS TO SPECIFIC DUTIES FOR THESE PRODUCTS

BUT YOU SHOULD SUGGEST THAT THIS ASPECT SHOULD BE LOOKED AT FURTHER

BY THE WORKING GROUP.

TOBACCO.

4. YOU SHOULD DRAW.ON MYTELNO. 949 IN DISCUSSION OF OUR REQUEST FOR

AN ENLARGEMENT OF THE 1974 QUOTA. YOU SHOULD MAINTAIN OUR REQUEST FOR AMUCH BIGGER QUOTA IN 1975 THAN THE 22,000 TONS PROPOSED, A

BIGGER QUOTA IS NEEDED BECAUSE INDIA'S TOBACCO EXPORTS ARE GROWING VERY QUICKLY (EXPORTS TO THE UK FROM THE COUNTRIES COVERED BY THE

JOINT DECLARATION OF INTENT ARE EXPECTED TO BE 20,000 TONS NEXT YEAR) AND BECAUSE INDIA'S POSITION IS DETERIORATING IN RELATION

TO HER MAIN CUPETITORS WHO ARE TO RECEIVE TARIFF ADVANTAGES UNDER THE

ARTICLE 24:6 SETTLEMENT AND THE NEW CONVENTION OF ASSOCIATION. WE WANT A QUOTA OF 28,000 TONS FOR OURSEVLES, AND OTHER HAVE PUT IN BIDS TOTALLING ABOUT 5,980 TONS. THE ITALIANS AND OTHERS HAVE SAID

THAT THE QUOTA IS NOT BEING USED FOR THE ASIAN COUNTRIES TO THE DEGREE TO WHICH IT WAS ORIGINALLY INTENDED, ARGUING THAT ONLY ABOUT A HALF OF THIS YEAR'S QUOTA HAS BEEN USED FOR THE JDI COUNTRIES AND

THAT BRAZIL HAS BENFITED IN PARTICULAR. YOU SHOULD SAY THAT IT IS

OUR INTENTION THAT THE UK SHARE OF THE QUOTA IN 1975 SHOULD BE USED

PRIMARILY FOR TOBACCOS FROM THE INDIAN SUB-CONTINENT. THIS YEAR THE

UK HAS USED THE MAJORITY OF ITS QUOTA FOR THEM BUT WE SEE

POSSIBILITIES OF FURTHER INCREASING THE JDI PROPORTION.

5. YOU SHOULD RESIST SUGGESTIONS THAT THE UK SHARE OF THE TOBACCO QUOTA SHOULD BE REDUCED. THE QUOTA WAS OPENED TO HELP JDI COUNTRIES

MAINTAIN THEIR TRADITIONAL TRADE IN OUR MARKET AND THE UK IS THEIR

BIGGEST MARKET.

PLYWOOD.

6. YOU SHOULD DRAW ON MYTELNO. 940 IN DISCUSSION OF OUR REQUEST FOR AN ENLARGED 1974 QUOTA. YOU SHOULD MAINTAIN OUR REQUEST FOR THE QUOTA TO BE CONVERTED TO A VOLUME BASIS IN 1975 IN ORDER TO MAINTAIN ITS VALUE. WE FIND THE COMMISSION PROPOSALS, WHICH ARE ESSENTIALLY A REPETITION OF THE 1974 QUOTA, INADEQUATE. WE WANT A QUOTA THAT WOULD ALLOW GSP EXPORTS TO THE UK OF 259,830 CUBIC METRES (EQUAL TO ABOUT 63 MILLION U.A.). A QUOTA OF THIS SIZE IS NEEDED TO COVER

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