CONFIDENTIAL
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Reference....
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Preferences : EEC and Hong Kong
In Paris last week Mr. D. J. C. Jones and I discussed his letter to you of 22nd September and your reply of 24th September (copied to Mr. Carter in the FCO).
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2. We agreed that, as Mr. Jones suggests in paragraph 5 of his letter, there was little point in raising the treatment of Hong Kong yet again with Di Martino at this stage but that we should find an opportunity of arguing our general concern with this problem and our proposals for its solution with selected representatives of the Six. When the question of "self election" was dis- cussed in the group in the context of the Secretariat's draft outline of a joint submission, I made clear that in our view there was no feasible alter- native to the proposal made in the report of the Special Group in 1967 and that this report referred in terms to countries, territories and areas. Everyone else who spoke on this subject took the line that self election must remain the OECD position, and that other compelling reasons must be found in order to exclude Soviet Bloc countries. The Americans in particular took this line very strongly and nobody came out with any counter proposal.
3. I gave a lunch for those representatives of the Six whom we could gather together at short notice. We did not bother with the Belgians or Italians and the Dutch were not available. Our guests were therefore Mlle. Guyot and de Sedouy of France and Mueller-Thuns of the Federal Republic. As usual
lle. Guyot was sympathetic but explained that there were very strong protectionist and political objections within the French Ministry of Industry to the inclusion of Hong Kong. This partly rested on the Colonial status of Hong Kong which would also apply to Angola and Macao. Mr. Jones and I made all the usual points about our concern for Hong Kong and its constitutional status and Mr. Jones then floated the proposal set out in paragraphs 5 and 6 of the commentary attached to his letter to you. We explained carefully how this would be likely to meet all the reasonable commercial problems raised within the Community by granting preferences to Hong Kong, that it would similarly exclude equally competitive products from other developing countries (in particular South Korea and Taiwan) and that it would be likely to satisfy both Hong Kong and the UK as avoiding the exclusion of all Hong Kong's present and future exports.
4. The French were unable to respond in detail to this proposition other than to ask questions to make sure they understood it fully but, following our luncheon, Mueller-Thuns told Jones that he had been very interested by our conversation and would make sure that this matter was raised again within the Community.
5. I expect that Mr. Jones will shortly reply to your letter describing very fully the contacts in Paris last week and suggesting what action we might now take.
I am therefore not copying this outside those most concerned here.
Mr. Goldsmith, CRE.1
c.c. Mr. Carter
lir. Britten
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LAST
FCO
REF.
Nr.
Mr. Morris, CRE.1
R.i
(0. H. kemmis) 1st October, 1969
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