Mr Elliott (FED)
MACAO AND THE EEC
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1. In the negotiations for Portuguese accession to the EEC, the chapter on external relations will soon be broached, which means that Portugal will have to make known what status she wants for Macao. We have hitherto taken the line that Macao should not be given a more favourable status than Hong Kong. This minute is intended to set out the issues and to invite confirmation that we should continue to take this line if Portugal requests some special status.
2.
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Hong Kong has no special status vis-à-vis the EC, and for EC purposes is treated as a normal third country (benefitting as an LDC from Community GSP). We did not seek any special status 12 for Hong Kong at the time of our accession, partly because we did not think that the aid relationship provided for under Part IV of the EEC Treaty was suitable to an expanding industrial economy like Hong Kong, and partly because we did not wish to complicate the position vis-à-vis China. Lord Carrington, when he visited the territory in March 1981, told 'unofficial' members of the Hong Kong executive and Legislative Council that there was no question of Macao being treated more favourably than Hong Kong in the Community. For their part, the Council appears to have made abundantly clear that they would strongly oppose any attempts to give Macao a better status.
3.
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There are a number of ways in which territories belonging to Member States can be associated with the Community. French
'Départements d'Outre-Mer' (DOMs) are integral parts of France, and are therefore also an integral part of the Community, as has been Greenland hitherto. French Territoires d'Outre-Mer' (TOMS), as well as most British dependent territories outside Europe (but not Hong Kong), are associated with the Community under Part IV of the EEC Treaty (giving them 'Overseas Country and Territory' (OCT) status). This means that they receive aid from the Community similar to that given to members of the Lomé Convention, and also enjoy certain trade concessions, particularly for their industrial exports to the Community (again in line with Lomé). Finally, there are a number of European territories belonging to or associated in some way with Member States (eg Gibraltar, the Channel Islands, Monaco) which have relationships with the Community tailored to their special circumstances so that they are part of the Community for some purposes but not for others.
4. If Portugal does ask for Macao to be associated with the Community, she is most likely to suggest OCT status under Part IV of the EEC Treaty. A recent article in the Brussels magazine 'Europe' reports - not necessarily reliably - that the Governor of Macao is seeking TOM status. If he is indeed
is
18
CONFIDENTIAL
/talking