TNAG-0132-FCO40-168-Tariff-preferences-for-developing-countries-1969 — Page 97

CONFIDENTIAL

EEC

4.

Instead there

these would probably provide for

From such soundings as Goldsmith and I obtained in Paris, I would

confirm paragraph 2 of A.L.'s memorandum referred to above. Di Martino

(Commission) told us that the Community line will now probably take the

following form. There will be no exceptions as such.

will be an extensive use of duty-free tariff quotas. In products where

there are little or no LDC exports to the Community such quotas would only

be notional and would not be published (i.e. in practice there would be

free entry, but the Community would reserve the right to fix tariff quotas

at a later stage if the situation as it developed should so warrant).

In other products, where there was a significant trade, substantive

tariff quotas would be established;

duty-free entry at existing levels of trade plus, say, 50%. There might,

however, be some more sensitive products where such relatively generous

tariff quotas could not be conceded. In the case of cotton textiles,

quotas at the existing restraint levels would also be admitted free of

duty. Di Martino pointed out to Goldsmith that, because

substantial imports by the Community from Hong Kong across a wide range

of products, this sort of formula could not be applied so extensively if

Hong Kong were included. For instance, the number of products where

"existing trade plus 50% could be given would be significantly reduced.

and there might even have to be some actual "exceptions". The impression

given was that, in these circumstances, the Commission were maintaining

their original proposal for the complete exclusion of Hong Kong from the

EEC scheme.

of the very

5. This information was supplemented by a conversation I had with

Mueller-Thuns, the German delegate. He asked me whether I was concerned

about the Community attitude on Hong Kong. I replied that I obviously

was and that surely some compromise could be found which could take care

of Community worries where Hong Kong was a substantial supplier compared

with other LDCs, but which would not exclude her altogether. I went on

to emphasise that the exclusion of Hong Kong from preferential benefits in

so large a market as the ELC could have materially damaging consequences,

CONFIDENTIAL

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