TNAG-0465-FCO40-530-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 63

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12 NOV 1974

HKK 6/598/1

TO PRIORITY FCO TELNO 4963 OF 6 NOVEMBER 1974 INFO PRIORITY DUBLIN GOVERNOR HONG KONG INFO SAVING BRUSSELS (FOR DODGE)M

MIPT: GENERALISED PREFERENCES FOR HONG KONG

1.

ALTHOUGH WE AND THE COMMISSION ARE FIGHTING HARD, RESISTANCE TO THE ADMISSION OF HONG KONG TO GENERALISED PREFERENCES FOR FOOTWEAR IS ALSO HARDENING. THE IRISH ARE DUG IN DEEPEST AND ALTHOUGH WE HAVE ALSO TRIED BILATERALLY WITH THEM (INCLUDING THEIR DESK OFFICERS FROM DUBLIN) WE HAVE NOT MADE MUCH PROGRESS FOR LACK OF ANY POSITIVE REASSURANCE WE COULD GIVE THEM.

AS WE UNDERSTAND THEIR WORRIES, THEY ARE LOOKING NOT ONLY AT DIRECT EXPORTS FROM HONG KONG BUT ALSO AT RE-EXPORTS OF HONG KONG FOOTWEAR FROM BRITAIN. WE KNOW THAT THE INSTITUTION OF ORDERLY MARKETING IS DISTASTEFUL TO HONG KONG BUT WE THINK THAT THE IRISH NEED SOME REASONABLY SPECIFIC ASSURANCES FROM HONG KONG ABOUT LIKELY DIRECT EXPORTS FROM HONG KONG UNDER A PREFERENCE. TO BE OF ANY USE THIS WOULD HAVE TO HAPPEN QUICKLY.

3. THE RE-EXPORT PROBLEM SEEMS TO WORRY THEM EVEN MORE, ALTHOUGH THEY HAVE NOT QUANTIFIED IT TO US. WE ASSUME (AND ARE NOT IN MUCH DOURT THAT THERE ARE NO WORTHWHILE ASSURANCES WE COULD GIVE THEM

AROUT ORDERLY RE-EXPORTING FROM BRITAIN. ONE

POSSIBLE ANSWER WOULD BE TO ENCOURAGE THE IRISH TO LOOK FOR THEIR SALVATION TO ARTICLE 115 OF THE EEC TREATY (WHICH PROVIDES FOR

DEROGATIONS FROM FREE CIRCULATION AT THE REQUEST OF A MEMBER STATE AND AT THE DISCRETION, WITHIN RULES, OF THE COMMISSION). IT IS NOT CLEAR THAT ARTICLE 115, WHICH HAS HAD A CHEQUERED HISTORY, WOULD APPLY TO DETOURNEMENT DE TRAFIC ARISING FROM TARIFF

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