TNAG-0045-FCO40-81-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 163

CONFIDENTIAL

BRIEF NO. G.1 EUROPEAN ECONOMIC COMMUNITY

PART III

BACKGROUND NOTES

MALAYS LA

Malaysi. earns a small surplus on visible trade, due almost

entirely to her exports of raw materials, especially rubber,

tin and hardwood. Only about 8% of Malaysia's exports in

1965 came to Britain, while about 11% went to the E.E.C.

2

If Britain joined the Community, there is no reason why

Malaysia's exports of rubber, tin, crude oil and hardwood should

be affected, since these products enjoy duty free entry into

both Britain and the Community. And none of Malaysia's main

exports are within the scope of the common agricultural policy.

But her relatively small exports of manufactured goods and

tropical products are subject to the common external tariff.

If we joined the E.E.C. without making special arrangements

for Malaysian exports these products, they would face reverse

preferences in the British market instead of enjoying preferences.

And if, despite Pritish influence, an enlarged Community in

evolving a common commercial policy were to take up a more

restrictive attitude on imports of 'low cost' manufactures from

Asia and elsewhere than we now have in Britain, Malaysia would

suffer.

3.

Malaysia in the 1961--63 Negotiations:

At the time of

the 1961-63 negotiations, Malaya was independent and Singapore,

Sabah and Sarawak were dependent territories whom it was planned

to incorporate with Malaya in the establishment of Malaysia.

Britain and the Six agreed that examination of possible

arrangements for the three dependent territories would be

deferred pending their further political development.

Negotiations proper therefore concerned only possible

arrangements for Malaya.

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CONFIDENTIAL