TNAG-0046-FCO40-82-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 19

CONFIDENTIAL

HONG KONG'S OTHER EXPORTS

23. At the last round of talks, although Hong Kong officials

argued that the application of the common external tariff to

ong Kong exports other than textiles 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 steel cutlery, optical

goods, foot-wear, electric light bulbs, toys and electric motors.

24. 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 the 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

2.9 33

further in paragraphs to below.

THEORETICAL POSSIBILITIES FOR DEALING WITH HONG KONG'S PROBLEMS IN THE CONTEXT OF THE UK. NEGOTIATIONS WITH THE SIX

To seek no special arrangements

25.

The Hong Kong Delegation envisaged two variants on this

theme.

(1) 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 to imports from the

Commonwealth.

(ii) Acceptance of the application of the common external

tariff to Hong Kong's exports to the U.K., even

if this had to be achieved in a single step.

Hong Kong officials were told that there was no evidence to

suggest that the Six were thinking in terms of (11); it could

be discounted as a probability. We can tell Hong Kong officials

that it would plainly be the easiest solution for us from the

negotiating angle to seek no special arrangements for Hong Kong,

as at (1) above. But we must be careful not to imply that we

shall necessarily be able to negotiate a longer transitional

CONFIDENTIAL

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