CONFIDENTIAL
The question of which countries should be beneficiaries under this scheme
has not yet been decided. We have recently made representations to the USA,
EEC and Japan that Hong Kong should be included. At present Japan seems to
be determined to exclude Hong Kong. The United States and EEC, while still
Il seeing great difficulty in including Hong Kong, have not closed the door
finally. Under their existing offer, the EEC propose that no one developing
country should be allowed to supply more than one half of the yearly quota
1.
ceiling for any product. They have been considering adopting a lower figure
for certain competitive developing countries, such as Yugoslavia, but have so
far been reluctant to accept even this arrangement for Hong Kong.
Nevertheles
there are recent indications that the Commission may be asking the Six to
agree to the inclusion of Hong Kong in principle by means of some special
.. arrangements, giving little significant benefit to Hong Kong but leaving the
door open to improvement in the course of our entry negotiations. The United
States claim that they will be ready to include Hong Kong if the EEC do so.
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16. We must clearly seize any opportunity of persuading the Six to include
Hong Kong even if this is initially on a very restricted basis and to leave
the way open to improved treatment when the generalised preference scheme
1
comes to be adopted on a common basis by the members of an enlarged Community.
We believe that this could best be done by an approach to the Six in the
context of our entry negotiations to consider the problems of Hong Kong as a
whole, including not only tariffs but also quantitative restrictions under
the Common Commercial Policy. The basis of such an approach is set out in
paragraph 19 below.
QUANTITATIVE RESTRICTIONS
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17 The Community are still in the process of evolving a Common Commercial
Policy in the field of quantitative restrictions. At the present time, France
maintains a considerable range of restrictions against Hong Kong exports in
breach of GATT. These cover such items as footwear, umbrellas, batteries,
radios, toys, photographic equipment and tablewear as well as textiles. None
CONFIDENTIAL