CONFIDENTIAL
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9. A further complication arose from 1 January 1974 when the United Kingdom, on aligning with the Ommunity's GSP, found herself in the position of having to discriminate against her own dependent territory in favour of several of Hong Kong's foreign competitors. The removal of this anomaly has been an important aim in the negotiations with our EEC partners and continues to be so.
10. The arrangements for the 1975 GSP, agreed by the Council of Ministers on 12 November, extend the GSP to Hong Kong rubber and plastic footwear, though leather footwear and textiles were still excluded. It was, however, agreed that the case of Hong Kong textiles would be reviewed when the Community's GSP for 1976 was drawn up.
Given the importance of textiles to Hong Kong's economy, there is still much to be done to remove discrimination against Hong Kong. But even the footwear concession had to be fought through against substantial Irish, Italian and Dutch opposition, and the achievement is not negligible. A substantial gain is also to be seen in the fact that in agreeing to amend the GSP in Hong Kong's favour the position previously adopted by some of our Community partners, that the question of Hong Kong had been settled once and for all by the British accession agreement, appears to have been abandoned.
Hong Kong & Indian Ocean Dept.
6 January 1975
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