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4. Early in the negotiations, it became clear that the Six
would not consider extending to Commonwealth countries in Asia
the status of Associated Overseas Territories under Part IV
of the Treaty of Rome. (Such associates enjoy unrestricted
free entry into the Community for all products except those
within the scope of the common agricultural policy, and are
also eligible to receive aid from the European Development
Fund). We were, however, able to secure agreement that
Britain should apply the common external tariff to imports of
manufactured goods and tropical products from Malaysia over a
longer transitional period than that for similar imports from
developed Commonwealth countries (this is called "soft decalage").
It was also agreed that the enlarged Community would negotiate
a trade agreement with Malaysia.
5.
Reactions in Malaysia to the Government's recent approach
to the B.E.C.: So far as the public at large are concerned,
there is very little interest in, or awareness of, the whole
issue. The Malaysian Government have taken the matter very
caimly. Reports suggest that they are on the whole in favour
of British membership of the Community on the grounds that it
will strengthen the British economy and thereby the Sterling
Area
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