TNAG-0046-FCO40-82-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 173

CONFIDENTIAL

notably

bly/India and Pakistan, The British textiles industry is already carrying out a survey into the productivity of its various sectors,

by the Board of Präte wch will be taken into account in consideration of our textiles policy for the period after the current arrangements come to an end.

industry. in 1970. They have not been encouraged to look for increased protection. In the circumstances we shall not be able to say very much more to the Hong Kong Delegation at the next round of

consultations; but we could perhaps expand a little on what we said

for mak last time on the following lines. We can take note of their wish that Hong Kong's present access rights to the markets of the UK. and the Six should be unimpaired by British entry into the Community (paragraph 7 (a) above); but we must not of course imply that this is an essential Commonwealth interest which has to be safeguarded. As regards (of paragraph 7), we should press the Hong Kong officials for the assessment of how they think the common external tariff will bear on different categories of textile exports. We could point out that £15.4m. worth of her total textile exports to us of £40.8m. are of items on which the common

D. paragraph 7, external tariff is between 2% and 4%. As regards (c) and (we could press rather more strongly on Hong Kong officials the idea that the best line in negotiations with the Six would be to say nothing at all about Hong Kong's textile exports to us. If Hong Kong thinking has to continued to develop on the same lines as before, they are likely to be sympathetic to this approach. HONG KONG'S OTHER EXPORTS

9. At the last round of talks, the presentation of Hong Kong's problems in respect of exports other than textiles was weak; and, although it was argued that application of the common external tariff would raise difficulties, the British Delegation was left with the clear impression that these were considered to be surmountable. The only items specifically mentioned were stainless

light- steel cutlery, optical goods, footwear, electric bulbs, toys and

ん electric motors.

h

10. The argument was put forward in this context that Hong Kong had no mass domestic market to rely upon, and that preferential duty-free entry to the British market was the only available alternative; Without a duty-free market in U.K., serving as a kind of proving ground, it would be much more difficult to develop and market new products. This point is considered further in paragraphs 3 below.

THEORETICAL POSSIBILITIES FOR DEALING WITH HONG KONG'

'S PROBLEMS IN THE CONTEXT OF THE U.K. NEGOTIATIONS WITH THE SIX To seek no special arrangements

11.

The Hong Kong Delegation envisaged two variants on this theme, (i) Coverage of Hong Kong exports to the U.K. by any general

arrangements which might be negotiated with the Six for the gradual application of the common external tariff.

/(ii)

HUNE TUENTIAL