TNAG-0047-FCO40-83-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 38

CONFIDENTIAL

Developed Countries".

The Delegations agreed that the term

"less-developed" appeared to be inter-changeable with "develop-

ing" in the Report. Mr. Gildea said that the report on a

system for generalised preferences prepared by the 0.E.C.D.

Special Group on Trade with Developing Countries seemed favour-

able to Hong Kong's interests especially as 'self-selection' was

the method recommended for establishing who would benefit from

the arrangements. Britain was a member of the Special Group,

and the Report could be taken to reflect our views. MY Audland

explained that any exceptions from the system which might be made

would be in respect of particular products from particular

countries and would come under a safeguard clause which provided

for the curtailment of special tariff treatment if exports

became too competitive. He said that so far the 0.E.C.D. report

had had a favourable passage, and that there were better prospects

for it than we had expected. The Hong Kong Delegation was given

a copy of the report in confidence.

The Possibility of Seeking Limited Preferential Access to an

Enlarged Community for Hong Kong's New Industrial Exports to Britain

8. Sir A. Snelling said that British officials had given

further thought to this idea, which had come up in the first

round of talks. We were inclined to think that it was not so

much the fact that Hong Kong had no home market for her main

exports which made her position special; the same could be said

for Ghana's cocoa and Zambia's copper. What was unique was that,

alone among developing countries, Hong Kong relied almost

exclusively on industrial products rather than raw-materials.

Mr. Gildea recalled that the average incidence of the c.e.t. on

the products exported by Hong Kong would be substantially

reduced as a result of the Kennedy Round and questioned whether the residual tariffs would have any real effect on Hong Kong's

exports. Mr. Selwyn suggested that many of Hong Kong's exports had a high income elasticity of demand which would mean that what really mattered to Hong Kong was the growth rate in the enlarged fommunity.

CONFIDENTIAL

/Mr. Cowperthwaite