CONFIDENTIAL
excluding Hong Kong's main competitors.
These would
clearly be Taiwan and South Korea. We could say that
following our entry into the EEC we would of course have
to adopt a common scheme with the other members but that
we would expect the EEC to come some way towards meeting
our position in return for our acceptance of duty free
imports from Taiwan and South Korea.
24. If both the EEC and the UK were then including Hong Kong
within the scheme, the US and perhaps even Japan would
find it more difficult to exclude her'.
C.
The Common Commerciel Folicy
25. It is in this field above all where we must do our utmost
to ensure fair treatment for Hong Kong. It seems likely
that most of the decisions to establish Community quotas
for Hong Kong goods will have been agreed before our
negotiations are completed, and we would then have to
impose the same restrictions ourselves. Therefore this
problem is likely to give rise to a major subject for
negotiations and diplomatic representations during the
next two years.
which
26. In the course of these representations, w might well go
on after the conclusion of negotiations to the period when
we are members of EEC., we should draw attention to the
GATT aspects of extending restrictions as a result of the
Common Commercial policy. Besides being subject to the
general GATT ban on quantitative restrictions, such an
extension would be contrary to the specific provision of
GATT that the formation of a customs union or free-trade
/area