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of cotton textiles from Hong Kong would be limited to
approximately the level of the existing voluntary arrangements.
Britain's exports of cotton textiles to the rest of the
enlarged Community increased substantially as a result of
British imports from Hong Kong, Britain would be prepared to
control exports of these goods to the rest of the Community.
On other manufactured goods the c.e.t. would be gradually applied
to imports into Britain from Hong Kong on the same basis as had
been provisionally agreed for India, Pakistan and Ceylon. Finally,
there would be provision for periodic reviews to isolate and
examine any problems in Hong Kong's trade relations with the enlarged
Community; if these showed that damage was being caused to
Hong Kong trade as a consequence of British entry, remedial action
would be taken.
6. On this last point there had been a counter-proposal by
the Six that remedial action should also be taken if any
Hong Kong exports were shown to be causing market disruption in
the Community. Moreover the Six, prompted by the French, had
declined to agree to reference being made to Britain's responsibility
for Hong Kong and the need to consider the living standards of its
inhabitants, unless mention were also made of the need to protect
the Community's industries from damage resulting from imports
from Hong Kong.
7. Mr. Haddon-Cave agreed that the talks should be purely
exploratory. Hong Kong had not yet decided how her interests
would best be served. He would report back to the Hong Kong
Government, and there might be a second round of consultations in
about two months' time. The Hong Kong Government might then wish to
be represented at a higher official level and to include one
two non-officials in their Delegation.
8. Mr. Haddon-Cave accepted that over the past few years
Hong Kong had become less dependent on the British market and had
greatly improved her export performance to the Community. Whereas
in 1960 Hong Kong sold just over 20% of her exports to Britain
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