CONFIDENTIAL
BRITAIN AND THE E.E.C.
CONSULTATIONS WITH HONG KONG OFFICIALS
Third Session Wednesday 25 October, 1967
at 10.30 a.m.
RECEIVED IN
66c
SNA.63
HWB 6/18/
British Delegation
Sir A. Snelling (in the Chair)
Commonwealth Office
Mr. F.G.K. Gallagher
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Mr. P. Selwyn
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Mr. C.J. Audland
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Mr. G.I. Brown
N. WV.S. Carter
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Mr. J.M. Healey
Mr. J.R.D. Gildea
Mr. J.A.B. Darlington Mr. F.R. Mingay
Hong Kong Delegation
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Mr. M.M. Ord-Johnstone
Board of Trade
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Secretary: Miss K.J. Lawrence
Mr. J.J. Cowperthwaite Mr. C.P. Haddon-Cave
Mr. P.C.M. Sedgwick
Mr. D.G. Jeaffreson
Mr. J.H. Martin
Financial Secretary, Hong Kong Deputy Fconomic Director
(Acting), Hong Kong
Hong Kong Government Office,
London
Commerce and Industry
Department, Hong Kong
Hong Kong Government
Representative, Brussels
Cotton Textiles
Mr. Cowperthwaite recalled that when Hong Kong's cotton textiles exports to Britain had first become subject to quantitative restriction, Britain had justified this in part by pointing out that these exports entered Britain duty free. But after British entry into the Community, Hong Kong's exports would be subject both to quantitative restrictions and tariffs. The impact of the tariff might be lessened if Hong Kong were to switch to exporting more finished goods and less grey cloth to Britain. He understood the Six were more concerned to protect their production of grey cloth.
2. Hong Kong's real concern however was with the level of access rights in an enlarged Community. By what might prove an unfortunate coincidence, the G.A.T.T. Long Term Arrangement was due to expire in 1970, the time at which Britain might hope to enter the Community. This could well give the Community an opportunity to put pressure on Britain to adopt a more restrictive import regime as part of a new common commercial policy for cotton textiles; and if the negotiations were at a critical stage, Britain might give way. Moreover, even if the Six did not insist that the total intake into the enlarged Community should be reduced, they might take the line that that intake should be redistributed among low cost producers, or turned into a global quota, which could only be to the disadvantage of Hong Kong.
3. Mr. Ord-Johnstone said that Whitehall thinking on how the subject of textiles should be handled in the negotiations was still at an early stage. But he felt that it would create
/difficulties
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