TNAG-0047-FCO40-83-Britain-s-entry-into-EEC-effect-on-trade-with-Hong-Kong-1967 — Page 52

1

VISIT OF MINISTER

COMEED' ITIAL

65

BIONE NO. 9

STATE FOR COMIKOUMTALTE AFFAIRS

TO HONG KONG

OCTOBER 1967.

Cormon Markot

1

Consultations are taking place with Hong Kong to discuss ways and moans of negotiating with the Community safeguards for Hong Kong's essential intorosts. The first round took place in London on 10th - 12th July (s note is attached); the second round, again in London, will begin on 24th Octobor. The talks are entirely without commitment. The final decision on the safeguards which we should try to secure for Hong Kong rosts with H.M.G. and must be takon in the context of our overall negotiating position

and tactics.

2. The Hong Kong delegation have a realistic approach and are well aware of the difficulties we are likely to encounter with the Six. They recognise that Association and a Morocco-type Protocol are both unnogotiable. They recognise that rights of access to the Community markets are of greater importance to Hong Kong than tariff løvels and set great store by the preservation and continued exercise of their G.A.T.T. rights. They are keonly aware of the danger that any request to the Six for spocial arrange- monts for Hong Kong is likely to stimulate the latter to seek protection from Hong Kong competition e.g. by a demand for a market disruption olause or severe origin criteria.

3. The preservation of Hong Kong's G.A.T.T. rights will be in the forefront of the resumod discussions. We might find it difficult to speak up in G.A.T.T. in support of Hong Kong against a fellow member of the Community. We have therefore been examining the possibility of dovolving on tho Colony full autonomy in the conduct of its commercial relations, so that it could become a contracting party to the G.A.T.T. in its own right. But the preliminary views of the Foreign Office are that this could produce a strong roaction from the C.P.0., a viow which we understand is shared by the Hong Kong.

4. In discussions with officials, the Minister will wish to show awareness of the issues noted in paragraphs 2-3 above, expressing the hope that the discussions in London will lead to agreement on the safeguards to be sought for Hong Kong in any negotiations. In public, the Minister might rofer to the detailed discussions in progross with representatives of Hong Kong and again express the hope that these will lead to a full understanding of Hong Kong's special interests in the negotiations. In discussion with

/unofficial

CONFIDENTIAL

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