CONFIDENTIAL
that there can be some cut-off point for Hong Kong, we think our objective might be to obtain a rigure which at least covers existing trade and if possible offers some growth and that the ceiling should be expressed perhaps as a percentage of the total ceiling available to all developing countries. This would be preferable to any figure related only to existing trade and might be similar to parallel arrangements which the Community might make in respect of Yugoslavia and competitive goods from South Korea and Taiwan. Although a solution along these lines would be much less valuable than unlimited duty free entry within the total ceiling for all developing countries, it would nevertheless be of some benefit to Hong Kong within the Community market and would facilitate a much more valuable solution in the US. On other products other than the dozen or so sensitive goods and textiles and footwear, Hong Kong would of course obtain the same access as other developing countries.
18. The Commission argues that Hong Kong should consider some form of voluntary control on a certain number of products. It may be worth putting to Hong Kong officials this argument which goes as follows. If Hong Kong were prepared to offer voluntary control, then this would go a long way to disarm the opposition of the Directorship-General for Industry which is complaining that the addition of twenty-two new tariff quotas to the Community Sch-me would make it administratively very difficult to handle. The other advantage of voluntary control is that it would greatly improve the chances of getting the Americans to include Hong Kong. The Community would be able to say that they were including Hong Kong in their scheme subject only to the exclusion of textiles and shoes (excluded by the Americans themselves). If however the Community had to say that Hong Kong's inclusion also involved tariff quotas on a whole list of sensitive products, the Americans, having no tariff quota arrangements, would be able to exclude Hong Kong on the grounds that they would otherwise have to take a
But it could be disproportionate amount of the burden. argued that Hong Kong's acceptance of voluntary control might conceal the extent of this restriction from the Americans.
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/If