NOTHING TO BE WRITTEN IN THIS MARGIN
CONFIDENTIAL
face a duty on entry to our market, and you
will know that we have announced our intention
of imposing a 15% duty on Commonwealth cotton
textile imports from 1 January, 1972. Clearly.
the application of the CET albeit at its
relatively moderate post-Kennedy Round level -
would be unwelcome for your other exports to
Britain. But I was interested and impressed
to learn that the detailed study done for the
Hong Kong Trade and Industry Advisory Board
in June indicated that the results of the
CET for goods other than textiles might be
less serious than had been previously envisaged.
Common Commercial Policy
6. A more serious danger, it seems to me,
is that in addition to the CET, the Six may
move towards a Common Commercial Policy in
relation to Hong Kong by adopting a common range
of quantitative restrictions. Such a move
would be in conflict with the provision in
Article XXIV of the GATT that the formation
of a customs union or free trade areas should
not lead to the intensification of existing
barriers to trade, and as non-members of the
EEC we should certainly resist such action.
But we must recognise that our arguments might
not prevail. We must recognise too that as
members of an enlarged EEC we shall be expected
to conform to the Common Commercial Policy.
UNCTAD Generalised Preferences Scheme
7. We are of course hopeful that your
difficulties can be reduced by the development
of the UNCTAD preferences scheme, and you
know that we have recently made representations