CONFIDENTIAL
HONG KONG'S OTHER EXPORTS
23. At the last round of talks, although Hong Kong officials
argued that the application of the common external tariff to
ong Kong exports other than textiles would raise difficulties,
the British Delegation was left with the clear impression that
these were considered to be surmountable. The only items
specifically mentioned were stainless steel cutlery, optical
goods, foot-wear, electric light bulbs, toys and electric motors.
24. The argument was put forward in this context that Hong Kong
had no mass domestic market to rely upon, and that preferential
duty-free entry to the British market was the only available
alternative; without a duty-free market in the U.K., serving
as a kind of proving ground, it would be much more difficult to
develop and market new products. This point is considered
2.9 33
further in paragraphs to below.
THEORETICAL POSSIBILITIES FOR DEALING WITH HONG KONG'S PROBLEMS IN THE CONTEXT OF THE UK. NEGOTIATIONS WITH THE SIX
To seek no special arrangements
25.
The Hong Kong Delegation envisaged two variants on this
theme.
(1) Coverage of Hong Kong exports to the U.K. by
any general arrangements which might be
negotiated with the Six for the gradual application
of the common external tariff to imports from the
Commonwealth.
(ii) Acceptance of the application of the common external
tariff to Hong Kong's exports to the U.K., even
if this had to be achieved in a single step.
Hong Kong officials were told that there was no evidence to
suggest that the Six were thinking in terms of (11); it could
be discounted as a probability. We can tell Hong Kong officials
that it would plainly be the easiest solution for us from the
negotiating angle to seek no special arrangements for Hong Kong,
as at (1) above. But we must be careful not to imply that we
shall necessarily be able to negotiate a longer transitional
CONFIDENTIAL
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