CONFIDENTIAL
No.
It is they
Six who
Won't
ади.
Our reference: IG 205/77/01
Your reference:
JR D Gildea Esq Board of Trade 1 Victoria Street London SW1
15
MINISTRY OF OVERSEAS DEVELOPMENT
Eland House, Stag Place, LONDON S.W.1
Telegrams: Ministrant, London, Telex Telephone: 01-834-2377
Киінем
RECEIVED IN
REGISTRY No.51
We
ший ден
tomimon
away
49
July 1970
I
-54
HANG/525/
1. Jeremy Peat has shown me the first draft of the BOT paper on Hong Kong. draft is an admirably clear statement of the very difficult problems which our accession to the EC would pose for Hong Kong; and it is therefore with some diffidence that I should like to point out some of the doubts that it has raised in our minds.
The
2. The impression the paper gives is that the inhibiting factor in our negotiating position in regard to Hong Kong is that it would not be in the British interest to obtain "associated status" for this colony, since full association would imply free entry for Hong Kong goods (including textiles) to the UK. whilst the admission of cheap goods would benefit domestic consumers, it would not be in the interests of domestic producers whose interests coincide with those of the producers in the Six.
3. If this impression is correct, then the paper could express this point clearly and explicitly, for internal consumption. It could go on to point out that, in our negotiations with the EEC about Hong Kong we have two main levers: the fact that she is a developing country and that she has "special relations" with the United Kingdom (to use the language of the Treaty of Rome). of these two the second is the more powerful. It is an approach that the Six are likely to understand: after all, they recognized in the Treaty of Rome their joint responsibility for all the dependencies of Members (and went a long way towards making special provision for their former dependencies). The case for an enlarged Community making special provision for Hong Kong is strengthened by the fact that the continuation of Hong Kong's dependent status is thrust upon us by the international situation, including the policies of China as well as those of the West. It would be entirely in the spirit of enlargement that the burdens which this imposes upon us should be shared by our future partners.
4. The EEC negotiatos may well know or suspect that we are not anxious to extend to Hong Kong the full benefits of association. Nonetheless it should not be impossible to present our agreement on this point as a concession on our part, in exchange for which we would expect to obtain certain commercial advantages for Hong Kong.
It is, of course, useful to realize that, as the paper points out, the chances of obtaining associated status for Hong Kong are practically non-existent. This should enable our negotiators to approach the subject with confidence that we are unlikely to be hoist with our own petard.
5. We gather from the paper that the main threat to Hong Kong is that it may become the subject of discrimination on two fronts: firstly, by being excluded from generalized preferences schemes, and secondly, by seeing an enlarged Community apply quantitative restrictions to its exports. The application by the UK of the common external tariff would be a comparatively minor disaster, if not accompanied by quantitative restrictions or exclusion from generalized preferences.
CONFIDE
16. Perhaps