The effects on Hong kong trade in the U.K.
2.
b.
Since about 20% of all of liong Kong's exports enter the U.K. market, Hong Kong's trading position could be even more seriously affected than it is at present with regard to EFTA competition, for in addition to having to face duty-free competition from Common Market countries, she will also have to surmount the Common External Tariff. At least with EFTA there is no Common External Tariff. There should therefore be a long transitional period during the course of which the Common External Tariff is gradually applied, and Hong Kong should be given an additional period of time, over and above the transitional period, before the Common External Tariff is applied.
Again the loss of Preference in the U.K. market is likely to inhibit the development of new industries in Hong Kong, inasmuch as in the absence of a home market in which to test out new products, there will be a reluctance to enter new industries. The use of the U.k. market as a testing ground for new products is best demonstrated by the camera and optics industry. Without the facility granted by Preference it is doubt- ful whether this industry would ever have got on.its feet, yet today it is an important growth industry for Hong Kong.
The concern for Hong Kong's trade in the Common Market
a.
b.
It is essential that Hong Kong should not lose her Most Favoured Nation status in Europe. In no circum- stances should Hong Kong be bracketed with Japan; nor should any discrimination against Hong Kong be permitted.
Hong Kong's overall trade with the enlarged Common Market must be allowed to expand.
"There must be provision for review at Hong Kong's request in the event it is found that Hong Kong's trade with the enlarged Community is being adversely affected."
Mr. Bowden thanked Sir Sik-nin for his firm and straightforward statement, but explained to the Meeting that at the present moment, Great Britain was only probing whether or not negotiation should be initiated for her to enter the EEC, and it was not even certain whether Britain would start negotiating. It would, however, be quite possible that the EEC might be enlarged to not only seven, but nine or ten countries, including many of the EFTA ones.
Mr. Bowden then said that he accepted Sir Sik-nin's view that AOT status for Hong kong might be the solution, but he pointed out that the AOT status suggestion had been refused once by the Six. He furti.er stated that one difficulty was that Commonwealth countries were not taking the same attitude on this matter. However, he gave assurance that Hong Kong would definitely be consulted.
3.
EFTA AND SOUTHERN IRELAND
Mr. T.k. Ann presented the third topic, EFTA and Southern Ireland, as follows: