CONFIDENTIAL
retaliation against the EEC, and we are advised thatze--cannot-itgally-retaliate
they belate. In the last resort therefore, we cannot be sure that we can
persuade the Six not to introduce a common system of quantitative restrictions
on llong. Kong before we join the Community. As this will then form part of their
Common Commercial Policy, they will at some stage ask us to state our readiness
to apply it once we are members.
It
19. Such a request would present us with a difficult problem. It would involve
us acquiescing in the application of restrictions which we considered to be
inconsistent with the GATT against a country which would still be a British
dependency. (It would not be a contravention of the GATT by the United Kingdom
to apply restrictions to Hong Kong since the GATT does not create rights or
obligations between metropolitan powers and their dependent territories.
would be quite contrary to our former practice and precept). On the other hand,
we must recognise that in principle all members of the enlarged Community will
be expected to conform to the Common Commercial Policy and in general we must
agree to do so. It would seem desirable to try to forestall such a situation
by opening discussions with the Six on the future regime for Hong Kong at a
fairly early stage in our entry negotiations, and an informal hint was volunteered
at the recent trade talks in Geneva that the EEC were now tending to regard Hong
Kong, like New Zealand, as a problem to which the United Kingdom would require
some special solution to be found. We whould take the line in such discussions
that the problems of Hong Kong in relation to the enlarged Community must be
discussed as a whole, including both tariffs and quantitative restrictions.
Although we may recognise that no form of association is likely to be offered,
we should not lightly concede that a dependency of the United Kingdom should be
denied the same treatment as the Six gave to all their dependent territories.
We should argue that it is essential that at the very least Hong Kong should
obtain some worthwhile benefit from the UNCTAD generalised preference scheme
as it will be applied by the enlarged Community. We should also aim in such
L เ
8
CONFIDENTIAL