Mr. C.J. Audland,
Common Market Department,
Commonwealth Office.
70
Copies to:
Mr.P. Selwyn Mr. J.M.Healey Mr. Gallagher
U.K./E.E.C. Draft Negotiating Brief on
Hong Kong
I am sorry to have been so long in letting you have my comments on the draft negotiating brief prepared by Mr. Healey. You may, however, be aware of their tenor from a discussion Mr. Brown had with Mr. Healey on 11 December,
2. With regard to the Hong Kong suggestion that Britain should move at the beginning of the transitional period to a different system of origin for Commonwealth preferences, based on the criterion of a change of state resulting from a manufacturing process, I agree that without a much more convincing case by Hong Kong it is sensible to omit reference to it in the negotiating brief. We could reconsider the question if Hong Kong does produce a case that merits our taking a second look at the question. it.
3. Mr. Selwyn commented on the omission from the brief of any reference to the possible loss of Hong Kong's G.A.T.T. rights in relation to the E.E.C. if we join the Community. Whilst I agree that the problem is a serious one for Hong Kong, I doubt whether the negotiating brief is the place to mention it. Perhaps, in order to stress its importance to Hong Kong, words like "about which they were particularly concerned" could be added to the penultimate sentence of paragraph 11.
4. My remaining comments are minor ones:
5.
(a)
(b)
In paragraph 2 and the table mentioned in paragraph 3, it might be helpful to show re-exports separately from domestic exports.
In paragraph 4 I agree with the point Mr. Selwyn has made about the reduction in the c.e.t. on some important items of interest to Hong Kong being well below the average tariff reductions in the Kennedy Round. Mr. Cowperthwaite also made this point.
(c) The word "adequate" in relation to
transitional periods appears once in paragraph 13 and twice in paragraph 15. Perhaps it ought to be made clearer that in these contexts it means that the transitional p eriod for the application of the c.e.t. to Hong Kong's exports should be no worse than for the exports of the Commonwealth generally?
Although it is perhaps not appropriate to refer in the brief to our undertaking to keep Hong Kong fully informed of the progress of the negotiations and to consult them as and when their interests are affected, I take it that there is no possibility of the undertaking being overlooked in the course of negotiations?
19 December, 1967
(W.S. Carter)