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In
the E.E.C. has agreed on is the common external tariff. other respects they have up to now maintained their own national policies (e.g. the different policies of France and the others towards imports from Hong Kong explained above). Two of the elements in a common commercial policy (when it comes to be established) of vital interest to Hong Kong will be the policy on imports from "cheap" Asian sources and the policy on imports of textiles (these of course will interlink). It will obviously be in Hong Kong's interest that on these aspects the relatively liberal inclinations of e.g. Germany and the Netherlands will prevail over the restrictionist tendencies of the French. If policies on these matters have been agreed before our entry it will be much more difficult for us to get them changed than it would be to influence their formulation after our entry. Even if they have not been formulated, however, it is possible that the French might use the excuse of British entry to press for agreement on common policies during the entry negotiations on lines
favourable to their interests.
On cotton textiles, in
particular, the very much greater proportion of British consumption filled by developing countries, especially from the Commonwealth (Hong Kong alone supplies 10% of our market and India another 10%), compared with the Dix could lead to
difficulties.
Conclusion
11.
The above is largely background but the Secretary of State may find it useful in any discussions on this subject with the Hong Kong government.
In the event
of discussions, however, the Secretary of State might attempt to inject some degree of realism into government thinking on this subject in Hong Kong. In the last resort if Britain were entering the E.E.C. she would not be deterred by the fact
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/that