CONFIDENTIAL
to explore with the Six the problems of ilon Kong's relationship with an enlarged Community, including improvements to the Community treatment of long Kong under the UNCTAD Preference Scheme;
(v) Hong Kong is so dep.ndent on trade that her rising
invisible carnings cannot be expected to compensate for any real damage to her exports. Financial aid is unlikely to provide a solution to Hong Kong's problems.
UK Negotiations
10.
The above negotiating objectives have been agreed by Ministers. In addition, Ministers decided that a formal request for association for Hong Kong under Part IV should be made to the Six.
11.
The then Chancellor of the Duchy of Lancaster, iir. Barber, in his statement of 21 July referred to our wish to see revived the provisional agreement reached in the 1961/3 negotiations regarding the association of our dependent territories and including the need to discuss the position of any dependent territories for which association was not considered appropriate. Eventually the Six agreed in principle to association for all our dependent territories with the exception of Hong Kong. This they saw as a "special problem" requiring further study in depth. This study is now under way at Deputy level, but have not got far.
12, Although association for Hong Kong has now been all but formally rejected by the Six, there is a strong argument for trying to keep open for the future a Part IV option. It appears almost certain that a very significant proportion of Hong Kong's exports to the enlarged Community, particularly textiles and footwear, will be excluded from the Community's UNCTAD Preferences Scheme, Hong Kong's agricultural exports will in any c.se not benefit. It will therefore be important to keep open the possibility for a Part IV option in the more distant future in the hope that this will enable us to secure concessions for Hong Kong on those goods that will receive no preferential treatment in the near future.
CONFIDENTIAL
/UNCTAD