CONFIDENTIAL
BRIEF NO. G.1 EUROPEAN ECONOMIC COMMUNITY
PART III
BACKGROUND NOTES
MALAYS LA
Malaysi. earns a small surplus on visible trade, due almost
entirely to her exports of raw materials, especially rubber,
tin and hardwood. Only about 8% of Malaysia's exports in
1965 came to Britain, while about 11% went to the E.E.C.
2
If Britain joined the Community, there is no reason why
Malaysia's exports of rubber, tin, crude oil and hardwood should
be affected, since these products enjoy duty free entry into
both Britain and the Community. And none of Malaysia's main
exports are within the scope of the common agricultural policy.
But her relatively small exports of manufactured goods and
tropical products are subject to the common external tariff.
If we joined the E.E.C. without making special arrangements
for Malaysian exports these products, they would face reverse
preferences in the British market instead of enjoying preferences.
And if, despite Pritish influence, an enlarged Community in
evolving a common commercial policy were to take up a more
restrictive attitude on imports of 'low cost' manufactures from
Asia and elsewhere than we now have in Britain, Malaysia would
suffer.
3.
Malaysia in the 1961--63 Negotiations:
At the time of
the 1961-63 negotiations, Malaya was independent and Singapore,
Sabah and Sarawak were dependent territories whom it was planned
to incorporate with Malaya in the establishment of Malaysia.
Britain and the Six agreed that examination of possible
arrangements for the three dependent territories would be
deferred pending their further political development.
Negotiations proper therefore concerned only possible
arrangements for Malaya.
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CONFIDENTIAL