TNAG-0747-FCO40-951-Visits-of-Foreign-and-Commonwealth-officials-to-Hong-Kong-1978 — Page 108

CONFIDENTI AL

WEDNESDAY, 26 APRIL

9.45 a.m.

Director of Trade, Industry & Customs; The Hon David H Jordan CMG MBE JP

a)

Textiles

The new EEC/Hong Kong Bilateral Agreement signed at the end of last year involved some substantial cut-backs in the amount Hong Kong will be allowed to export to the EEC. In particular, certain "sensitive" textile items suffered a considerable reduction on their 1976 quota levels. However, the immediate impact of the MFA on the Colony's economy has been only marginal, mainly because the base year, 1976, was a particularly good one for Hông Kong, while in 1977 their textile exports were somewhat depressed.

As a result, the new agreement does not involve any actual reductions in deliveries in 1978. It does, however, greatly limit the opportunities for growth over the next five years, There is also the danger that other exporters will use the Hong Kong/EEC Agreement to support their own case for cut-backs Norway have already done this.

b)

Generalized Scheme of Preferences (GSP)

Under the GSP the EEC gives developing countries favourable treatment in their trade with the Community. Hong Kong has been included in the Scheme for some time, but has not been given the benefit of the preferences in certain categories (mostly sensitive textile goods). At the moment, we are pressing for the removal of this discrimination which causes particular irritation in Hong Kong because her main competitors, notably South Korea, are not made to suffer similarly. The DOT are not averse to the idea of removing the discrimination. But, at the same time they are questioning whether Hong Kong should be treated as a developing country for this purpose at all. At the end of the day what is likely to happen is that the discrimination will be removed but that a new regime will be created under which "super competitive" producers, like Hong Kong and Korea, do not enjoy quite such generous preferences as those extended to the more deserving developing countries,

11.00 a.m.

Acting Governor: Sir Denys Roberts KBE QC JP

Sir Denys Roberts is leaving his present post as Chief Secretary in August this year to be replaced by Jack Cater. In May 1979 he will become Chief Justice in succession to Sir Geoffrey Briggs. These changes are not yet public knowledge (though Sir Denys himself is aware of them).

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CONFIDENTIAL