TNAG-0632-FCO40-780-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 110

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Discriminatory Application of Reductions in Base Levels

Hong Kong's general attitude to proposals for reduction in base levels in regotiations under the MFA is set out in a separate paper.

The concept of re-distributing quotas from the successful exporters to the unsuccessful seems, however, even more objectionable, both in principle and in practice.

2.

The grounds that have been used to justify the application of this proposal to Hong Kong have been:

(i) other exporting countries have a lower GNP than

Hong Kong;

(ii) Hong Kong has a large visible trade balance with

the EEC;

(iii)

other countries have trade deficits with the EEC;

(iv)

other countries' predicament with regard to a new MFA needs to be considered;

(v) other countries have a greater claim than Hong Kong;

(vi)

since the cutbacks are to be applied to more than one supplier, they are not discriminatory.

•

CNP

3.

Some other countries do indeed have a lower GNP than HK, but surely the only figure that could possibly be relevant in this context is GNP per head? In 1976 the following

countries with which it is understood that the EEC intends to seek bilateral agreements all had per capita GNP higher than Hong Kong's: Israel, Poland, Spain, Ilungary, Singapore, Greece. Is it intended that their access to the EEC's market shall also

be reduced?

4.

If GNP is to be a measure of the extent to which any country should be permitted to export textiles (though it is

/difficult