TNAG-1372-FCO40-1818-Ministerial-visits-from-the-UK-to-Hong-Kong-1985 — Page 149

GRS 350 CONFIDENTIAL

FM HONG KONG

TO PRIORITY FCO

TELNO 2203

OF 18022OZ OCTOBER 85

CONFIDENTIAL

AMENDED DISTRIBUTION 18 OCTOBER 1985

INFO PRIORITY HONG KONG GOVERNMENT OFFICE LONDON. PEKING

INFO PRIORITY WASHINGTON

WASHINGTON PLSEASE PASS A COPY TO PETER LO

205

MIPT: BACKGROUND NOTES

A

-

THURMOND/JENKINS BILL

THIS PIECE OF LEGISLATION WHICH HAS ALREADY BEEN PASSED BY THE HOUSE OF REPRESENTATIVES AS THE TEXTILE AND APPAREL TRADE ENFORCEMENT ACT. AND IS PENDING BEFORE THE SENATE. HAS GIVEN RISE TO CONSIDERABLE CONCERN IN HONG KONG. BASED ON ACTUAL 1984 TRADE. THIS LEGISLATION. IF ENACTED. WOULD CUT HONG KONG EXPORTS OF PRODUCTS WITHIN THE AMBIT OF THE MULTIFIBRE ARRANGEMENT BY 13 PERCENT AND OF SILK. RAMIE AND LINEN ARTICLES (WHICH ARE CUTSIDE THE MFA) BY ABOUT 70 PERCENT. THE VALUE OF TRADE LOSS TO HONG KONG COULD BE OF THE ORDER OF US DOLLARS 1 BILLION. OUT OF HONG KONG'S TOTAL DOMESTIC EXPORTS TO THE WORLD OF US DOLLARS 17.7

BILLION IN 1984.

B UNITED STATES GENERALISED SYSTEMS OF PREFERENCES (USGSP)

IT IS UNDERSTOOD THAT LEGISLATIVE PROPOSALS ARE BEING CONSIDERED BY REPUBLICAN SENATORS WHICH WOULD REMOVE HONG KONG. SINGAPORE AND ISRAEL FROM ELIGIBILITY FOR THE USGSP. AS ISRAEL IS SEPARATELY COVERED BY OTHER ARRANGEMENTS. HONG KONG AND SINGAPORE - TWO OF THE MOST OPEN TRADING ENTITIES - WOULD THUS BE SINGLED OUT FOR EXCLUSION SOLELY ON ACCOUNT OF GNP PER CAPITA. INTIAL SOUNDINGS OF OFFICIALS IN USTR. TREASURY AND STATE INDICATE THAT WHILE THEY ARE AWARE OF THE PROPOSAL THEY HAVE INADEQUATE RESOURCES WITH WHICH TO ADDRESS IT. HONG KONG'S AIM IS TO NIP THE PROPOSAL IN THE BUD. IF IT WERE TO BE INCORPORATED IN A TRADE BILL IT COULD PROVE IMPOSSIBLE TO FIGHT. HONG KONG WOULD THEN BE PLACED AT A COMPETITIVE DISADVANTAGE WITH ITS MAIN COMPETITORS. KOREA AND TAIWAN. WHO HAVE GENERALLY GAINED TRADE AT HONG KONG'S EXPENSE WHERE HONG KONG HAS LOST BENEFICIARY STATUS IN INDIVIDUAL PRODUCTS.

HKK 02716

RECEIVED IN REGISTRY

2 1 OCT 1985

DESK OFFICER

INDEX

RECISTRY

PA

Action Take!

CONFIDENTIAL

/ JAPAN

206