TNAG-0046-FCO40-82-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 172

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CONFIDENTIAL

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t tiles to the U.K./constitute over 11% of her exports of all commodities to all destinations. The main points made in discussion

luring the first round of consultations were as follows:

(a) Hong Kong wishes to see her present access rights to the

(b)

(c)

Key thought- kat-

which appeared A avoid with ki teural'in-

(a)

markets of the U.K. and the Six unimpaired by British entry into the Community.

officials said

Hong Kong considered that, while the application of the common external tariff to her exports to the U.K. might not in itself affect the level of trade, it would be likely to depress wages and/or profit margins. We agreed oammented that the level of exports was not likely to be

sugqunā kai- affected; but the pattern of trade might. Hong Kong would probably upgrade the qualities of her exports, and specialise in items where she had a competitive advantage. We also suggested that Hong Kong officials should prepare

advance o a note in preparation for the next round of consultations showing how they think that the common external tariff

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will in fact bear on different categories of tuile uprts Ahí V.K.

Oltinials Inggisted,

SIX

Hong Kong showed that the Six were unlikely to consider isolation of the U.K. market for textiles. As thei present policies were far more restrictive than those of Britain, we were likely to come under pressure to reduce our imports from Hong Kong. At present, within the Community, the re-export of imported textiles was limited by various restrictive arrangements; but the European Commission were determined to achieve a common commercial

policy by 1970, with all that this would imply. If free circulation of imported textiles were to be permitted, categorisation would have to be tighter and the scope of bilateral agreements would have to be gradually extended to new products not yet subject to restraint. We suggested that one possible line with the Six in the

$75. negotiations would be to say nothing about textiles; which would imply accepting the application of the common

woul

it thu fix external tariff, and leave them to raise the question of

If they did, we should be in a fairly strong negotiating position, since we should be able to argue that either the reduction of our own imports from Hong Kong, or the acceptance of a ban on their re-export to other member countries, would be discriminatory treatment foreign to the spirit of the Community.

kinking of Hing safeguards for their own markets if they wished. Kong Officials,

8. The question of our imports of cotton textiles is of course a very wide one, affecting many countries besides Hong Kong, and

/notably

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