TNAG-0750-FCO40-954-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-UK-1978 — Page 78

CONFIDENTIAL

5.

Hong Kong and the GSP

1.

Under the Generalised System of Preferences (GSP) Scheme the EEC allows

imports from developing countries within certain limits without duty. Hong Kong benefits from most of the provisions of this scheme, but is excluded from two

product categories: certain sensitive textile categories and leather footwear.

In both cases the quota is so small that there is little economic loss for Hong

Kong but the Hong Kong Government are rightly concerned at being discriminated against: the exclusions do not apply to her principal competitors, notably South

Korea.

2. On a number of occasions in the past

British Ministers and senior officials

have confirmed that HMG is working to end

this discrimination. The Hong Kong Government have recently asked for reconfirmation of our position. The

instructions to our negotiators in the 1978

round of GSP talks specifically instructed

them to seek the removal of this discrimi-

nation against Hong Kong and DOT Ministers,

who are being consulted, are therefore expected to agree a statement shortly. This will be submitted to the Minister of State

before issue.

CONFIDENTIAL

13.