OONFIDENTIAL
0. At that stage I tried to probe Tran more deeply on
exactly what action would be taken to limit Hong Kong in cases where the Community were genuinely worried. I said that it was really hardly worth bothering to administer any cases where Hong Kong would only be given, say, 10% of a quota. The minimum should be at least 20% and I would hope that it would be higher. Furthermore, in cases where the quota including Hong Kong would be very much higher than the quota excluding Hong Kong we might well prefer to see Hong Kong excluded altogether from the product in question in order to keep the quota smaller. Otherwise the situation might
arise where Hong Kong would receive little or no benefit from heing given a molest share of a quota whereas the size of the quota in question would be increased very considerably with the inclusion of her trade to the benefit of her competitors or potential competitors. thought that it could be dealt with in appropriate cases by adjusting the size of the quots through including only Hong Kong's ceiling limitstion. He would think about the position and felt sure that something could be worked out. I then said that our assumption was that, outside the specific area where there would be special arrangements for Hong Kong, she would be permitted to benefit up to 50 of the quota in the same way as any other developing country. iran replied that this would be the case with sensitive products. With other products they would not even try to impose a ceiling unless member countries asked for surveillance.
Tron said that he saw the point and
CONFIDENTIAL
/French Attitude