TNAG-0046-FCO40-82-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 15

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17.

In the last round of talks, the Hong Kong

representatives asked what would happen to Hong Kong's GATT rights if the Member States of an enlarged Community withdrew from the GATT as individual countries, and re-joined as a Community. The Six have showed no sign that they

consider this necessary and it is most unlikely that such

1

a thing would happen within the time-scale of British

negotiations. If, at some future date after British entry, the enlarged Community found it necessary to take this step, Britain could no doubt ensure that satisfactory arrangements were made for Hong Kong.

COTTON TEXTILES

Her

Her exports

18. Cotton textiles are Hong Kong's biggest problem. exports of cotton textiles to the U.K. alone were worth £41 m. in 1966 and constituted over 11 per cent of her exports of all commodities to all destinations.

of cotton textiles to the Six were worth a further £28 m.,

of which four-fifths went to the Federal Republic of

Germany. The pre-eminent position of Hong Kong in the

markets of the Six is due to the fact that, until recently,

she benefited as a dependent territory from the OECD Code

of Liberalisation. International trade in cotton textiles

from less-developed countries has, since 1962, been

conducted within the framework of the GATT Long Term

Arrangement, which was recently extended to run until

30 September, 1970. At the time of the last negotiations,

cotton textile imports into the U.K. were limited by a

system of agreements with our traditional suppliers for the

voluntary restriction of their exports. In 1966, however, a

quota system was introduced. Today, both we and the Six

control imports by a system of quotas closely related to

past performance and with some provision for growth. The

U.K.

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