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in fields such as aviation or monetary policy, in addition to the field of commercial policy. He wondered if there was not a danger of Hong Kong ceasing to be a British Colony and becoming instead a Colony of the Community. The constitutional position of the Six's dependent territories was different from that of Hong Kong. He thought there could even be fields where the Six might wish Hong Kong to take action which would be offensive to China. He wondered whether the U.K. might contemplate making some declaration on joining the Community, as to the practical limitation on its power to give directions to the Colony. Sir C. O'Neill said he could not envisage the Community requiring Hong Kong to take action offensive to China against the U.K.'s advice. He admitted that there could in theory be problems in other fields and this was a matter to which it would be necessary to give further thought. There might, of course, be some commercial advantage for Hong Kong if it were (which was certainly not now the case) regarded as a Colony of the Community. Mr. Cater said that if China thought Hong Kong was becoming a Colony of the enlarged Community this might be a different matter. Sir J. Cowperthwaite said it was not only a question of the Community telling Hong Kong to do something it did not want to do but also of telling the Colony not to do something that it did want to do. Mr. Laird wondered whether this question of sovereignty was related to the question of delegation of authority. Sir J. Cowperthwaite said that in a sense this was so, except the delegation of authority was a reversible business
6. Turning to the question of the Generalised Preferences Scheme, Sir C. O'Neill said we had thought it right to raise the position of Hong Kong under the scheme in the context of our application for membership of the Communities partly because of the Six's sense of embarrassment, to which he had referred at excluding Hong Kong from Part IV association. We felt the enlargement negotiations gave us the best opportunity of exploiting this feeling in Hong Kong's interest. We believed that the Community thinking was now rather more favourable to Hong Kong than had seemed probable a few months ago. We would, if the Hong Kong Government saw no objection, continue
our discussions with the Communities on this basis.
Sir J. Cowperthwaite said that the Hong Kong Government had
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CONFIDENTIAL