TNAG-0045-FCO40-81-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 175

ANNEX 'C'

Confidential

TALKING POINTS FOR USE WITH THE GOVERNOR AND OFFICIALS

If and when a decision is reached to re-open negotiations we

shall have to give the most careful thought to the question of our

negotiating position on Hong Kong. While it is perhaps tempting to think

that we might be able to start with a clean slate, putting forward once

more the case for associated status, I think we must reconcile ourselves

to the virtual certainty that we shall get no better terms for Hong Kong

than those in prospect in 1963. This means that the Six will insist

on the Common External Tariff being applied by Britain to imports from

Hong Kong and that we shall once more have to fight hard to find ways

and means of softening this blow. In 1963 the ameliorating provisions

envisaged were firstly that the C.E.T. should be applied over a

transitional period of several years; and secondly, the inclusion of an

undertaking to keep under review the effect of the progressive

application of the Common External Tariff on Hong Kong's exports to

Britain, with a view to remedial action where damage was being caused.

In return for this latter provision we would no doubt have to accept

the converse i.c. an undertaking that remedial action would be taken

if it could be shown that Hong Kong's exports were causing disruption

to industry in the Community.

•

We realise that in the case of cotton textiles exports the

position is particularly vulnerable. While the only common protection

on imports of cotton textiles by the Community as a whole remains the

Common External Tariff, the effective restrictions on these imports are

the quantitative restrictions under the G.A.T.T. Long Term Arrangement.

Until such time as the EE.C. establishes a common commercial policy

<<

quantitative

- and they have not made very much progress so far

restrictions on imports from outside the Community are a matter for the

individual Member states. If we were in the Market we might come under

pressure, in the context of formulating a common commercial policy, to

follow the restrictionist policies of E.E. C. countries. It is conceivable,

/on