CONFIDENTIAL
Our approach to Europe
10.
Another factor is the pronounced European stance
of our policy in recent years and its consequences for
Hong Kong. One of the consequences of our membership
of EFTA is that a wide range of products from EFTA countries
now enter the UK duty free whereas on some of them Hong Kong
is charged duty. (Hong Kong is particularly worried about
low-cost Portuguese competition in textiles.)
If we
obtain entry into EEC, Hong Kong will almost certainly be
shut out from membership on an associate basis and,
losing its Commonwealth preference, will have to compete
in the UK market across the EEC's common external tariff.
The Handling of 11. There has been a certain reaction in Hong Kong to Hong Kong s
Affairs
the successive mergere which led to the formation of the
Foreign and Commonwealth Office. Somewhat unreasoning
fears were felt, among officials as well as unofficials,
that those who handled liong Kong's affairs in the merged
office would have an inadequate knowledge of its problems;
or that Hong Kong's intereats would weigh lightly if they
had to be measured in the balance against the greater
interests of our relations with foreign or independent
Commonwealth countries; or that with the heavier responsibilities
falling on Ministers, they would not be able to give full
consideration to Hong Kong's particular interests. However,
frequent visits in the past eighteen months have done
something to dispel these fears and any distrust, and we
think that Hong Kong officials are now more ready to make
allowances for the short time the merged office has been operating, for the more frequent staff changes and for the
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CONFIDENTIAL