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Hong 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.
13. 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
further in paragraphs 16 to 20 below.
THEORETICAL POSSIBILITIES FOR DEALING WITH HONG KONG'S PROBLEMS
IN THE CONTEXT OF THE U.K. NEGOTIATIONS WITH THE SIX
To seek no special arrangements
14. The Hong Kong Delegation envisaged two variants on this
theme.
(i)
Coverage of Hong Kong exports to the U.K. by
any general arrangements which might be
negotiated with the Six for the gradual appli-
cation 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 (ii); it could
be discounted as a probability. Hong Kong officials could be
told at the next round of talks that (i) would plainly be the
easiest solution for us from the negotiating angle. The Six
might of course then say that they would need protection from
the danger of deflection of trade resulting from the scale of
/Hong Kong's
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