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from non-Commonwealth sources.
If we entered the 3.3.C.
the rules would require that all Hong Kong's exports to us
should pay the common external tariff, whereas goods from
other 1.3.C. countries would enter duty free. Hong Kong
would then not only lose hur free entry but would have to
face reverse preferences in the British market in favour of
the other member countries of the enlarged Community. How
this would affect Hong Kong would be a matter of conjecture,
but during the Brussels negotiations in 1962 the Hong Kong
government thought that up to a half of their exports to
Britain would face difficulties. (It is relevant to note
that the non-discriminatory import charge had the effect of
stopping the expansion of Hong Kong exports to Britain last
year).
1961-63 Negotiations
7. During the last negotiations no decisions had been
reached on how to treat Hong Kong before the negotiations
broke down. We had originally proposed Association (which
eventually would have given Hong Kong frus entry to the whole
of the enlarged Community) but the Six bejected this out of
hand on the grounds that Hong Kong was economically in an
entirely different status from the other associated territories
producing mainly tropical products and raw materials (i.e. her
exports were in direct competition with industries in the
3.4.0.). Likewise the Cix would not accept the continuation
of free entry for Hong Kong's exports to Britain alone as
they argued that this was incompatible with the Common Market.
The British delegation therefore proposed that the
common external tariff should be imposed on Hong Kong's
exports to Britain only by gradual stages and that the effect
should be examined with a view to taking remedial action if
damage were shown to be resulting. The Commission and some
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