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2. On this basis officials and businessmen spoke as follows:
(a) Her Majesty's Government should ask the Community for an association agreement with Hong Kong. If this were not possible or were refused they should ask for special arrangements to ensure duty-free access for Hong Kong products to the British market after British entry into the Community, and/or secure means by which Hong Kong had access to the enlarged Community on at least as good terms as the developing countries and was not subject to any other form of restriction. Her Majesty's Government should anyway press for Hong Kong to be included as a beneficiary in the Community's offer under the generalised preferences scheme.
(b) Alternatively Her Majesty's Government might agree to return to Hong Kong the duties they would have been obliged to impose on Hong Kong imports into Britain under the Common External Tariff.
(c) It would be unfair to Hong Kong if, after British entry into the Community, the present members of EFTA, in particular Portugal, had free access to the Community market, if Hong Kong did not. (d) British entry should not be followed by another sterling devaluation in which, as in 1967, Hong Kong would be one of the principal sufferers. Hong Kong had too high a proportion of its reserves in sterling. (e) Hong Kong's constitutional position as a British dependency should not deprive it of the right to be informed and consulted about Her Majesty's Government's conduct of the negotiations with the Community so far as Hong Kong was concerned.
(f) Her Majesty's Government should not impose the 15 per cent duty on Hong Kong textiles due in January 1972 so long as the prospects for the colony's economy were in doubt on account of the British EEC candidature.
(g) In no circumstances should Hong Kong be treated worse than its trading competitors, Taiwan, South Korea, Pakistan, etc., in respect of generalised preferences. To act otherwise would precipitate a major economic crisis in the colony.
(h) Her Majesty's Government must do all possible to combat increasing
protectionism in the United States.
3. The essence of Mr. Rippon's reply to these points was that Hong Kong's problems should be seen more in the context of the development of world trade as a whole than in that of the British candidature for membership of the Communities. Britain had to be strong and solvent. She could influence the Community and beyond that the world more effectively and in a liberal direction from inside rather than outside the Community. Her Majesty's Government recognised that a major problem was resurgent protectionism in the United States as in Europe. Her Majesty's Government would protect Hong Kong's interests to the best of their ability and maintain pressure for Hong Kong's inclusion in the UNCTAD scheme for generalised preferences. But Hong Kong had profited greatly from the trading patterns of the last 20 years, and would have to adapt itself to profit equally from the opportunities of the next. He appreciated that Hong Kong above all wanted freedom to trade on level terms in world markets.
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