CONFIDENTIAL
(62
GOVERNMENT OFFICE
HONG
KONG
5 4
PALL
MALL
Our Ref: 1/2/381AC(C)
G.R. Kinnear, Esq., 0.B.E.,
Hong Kong Department,
Foreign & Commonwealth Office,
King Charles Street,
London, S.W.1.
by zen says
LONDON S. W. I
3rd September, 1970.
RECEIVED N
RGISTRY No.51
HICKC/SW)
Thuile, As ठीक
We discussed recently an approach by the BBC
for comments by this office on the effects on Hong Kong of British entry into the European Economic Community. This has raised the question of how much, or how little, it is desirable to say in answer to press, radio and television queries on this subject.
2.
I have received as yet no instructions from the Hong Kong Government, but the latest views of which I am aware incline towards fairly extensive comment both on those effects which are an inevitable consequence of British entry and on possible developments, well-known through press comment, which may ameliorate such effects as are likely to be adverse. Such comments would not affect the 'low posture' approach which the Hong Kong Government agrees should be adopted in the negotiations themselves, and would be put in such a way as not to disparage the Community or oppose British attempts to enter it. Of course, comment in detail on the negotiating positions would be avoided.
3.
In my opinion, implementation of these views would, in outline, involve stating that British entry would almost certainly bring with it an end to the Commonwealth Preference system, under which 90% of Hong Kong's exports to the United Kingdom currently enjoy an advantage over competitors outside the Commonwealth, the EFTA countries and Ireland. An end to Commonwealth Preference, coinciding with duty free entry for goods from the EEC, would clearly have an adverse effect on the competitive position in the British market of many of the most important items in Hong Kong's exports to Britain, such as toys, radios, wigs and certain textiles, where the Commonwealth Preference system means they now enter free of duty. This effect could seriously damage the prospects of a number of Hong Kong industries, such as those making footwear and cutlery, which are heavily dependent on the British market, and it would also prevent the use of Britain as a quasi-domestic market for new industries being developed in Hong Kong. On the other hand, Hong Kong would hope to share in the increased trade which an enlarged Community should generate and could expect Britain to defend Hong Kong's GATT rights of access from within this enlarged Community. The position after entry would be improved if Hong Kong, along with other developing countries, received preferences in such a
.../2
TELEPHONE 01-930-7951
CABLES HONGAID LONDON S.W.I