TNAG-0464-FCO40-529-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 80

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(a) the rest of the Community are unlikely to be moved by threats;

Hong Kong would be antagonising them to no purpose.

would be considerable erosion of such sympathy as there is

for Hong Kong's position; this might lead to the abandonement

of any idea of GSP improvements for Hong Kong's textiles, or

even footwear; indeed, it could increase support for the Dutch

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view that super-cometitive suppliers should not receive GSP

benefits at all

(b) by insisting on negotiating under Article 3, Hong Kong would

run the risk of-lopsing-administration of the controls (see

para.4). There are financial and other advantages to Hong Kong

in retaining management of the quotas in her own hands. (para 7)

Hong Kong should bear in mind that there are already disturbing

suggestions by a number of Com munity countries that the new

textile agreements should be on the basis of import control instead

of export restraint,

(c) while we fully understand how objectionable GSP discrimination

is to Hong Kong, we believe that in practical terms elimination

of this discrimination is of less importance to her than the

securing of the maximum access possible under the new nstraint

arrangements. Even as a full beneficiary under the EEC's textile

GSP, Hong Kong would only obtain duty-free entry for a small

proportion of her exports to the Community (and as she has often

pointed out, the financial benefit of the concession goes

to the importer, not the exporter). We suggest that Hong Kong

should resume such negotiating muscle as she has for the textile

agreement negotiations rather than expend it (almost certainly

fruitlessly, and probably counterproductively) in a GSP context.

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