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Get. 323
CONFIDENTIAL
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that the Japanese agreed to terms which permitted the European Countries concerned to retain certain discriminatory quantitative restrictions on imports from Japan, or established agreements for export restraint by Japan. Under a fully fledged common commercial icy all these agreements would need to be renegotiated by the munity institutions to apply to the Community as a whole. But this is not likely to be the case in practice a registering of all the commercial treaties and other arrangements involved has revealed that there are some 270 of them. Agreement has been reached on the temporary continuance of the more innocuous of these which will have no practical effect on the common commercial policy. But in the case of some other arrangements difficulties are already arising. A case in point is the French insistence on re-negotiating their bilateral trade agreement with the Soviet Union. The Commission clearly has ambitions to negotiate all trade agreements and treaties on behalf of the Community as a whole but it seems unlikely that Member States, especially France, will be willing to concede this, at least for the present. It should be noted, however, that there are already limited trade agreements between the whole B.4.C. and Israel, Iran and India.
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(b) Anti-Dumping Regulations
The E.E.C. has now agreed uniform anti-dumping regulations to be applied to dumping into any part of the Community. These regulations appear to be fully compatible with Article VI of the GATT as well as the Anti-dumping Code negotiated during the Kennedy Round, of which the E..C. and all the Member States are signatories. This is satisfactory from Hong Kong's point of view and it seems unlikely that we will experience any difficulties with the E..C. in this field.
15.
(c) Rules of Origin
A Regulation relating to a common definition of the origin of merchandise was approved by the Council of Minis ters on 27th June, 1968. Member States were given until the end of the transitional period (31st December, 1969) to harmonise their own internal systems in order to comply fully with the Regulation. Among the aims of the Regulation is to define the origin of goods for the purpose of "the uniform application of the Common Customs Tariff, of quantitative restrictions, as well as of other measures adopted by the Community or Member States in respect of the importation of goods". It might be noted that the Regulation provides inter alia that an article, in the production of which two or more countries have taken part, shall be deemed to originate in the country in which the "final substantial and economically justified processing or working took place, such processing having resulted in the manufacture of a new product or representing an important stage in such manufacture". As it stands this would appear to be satisfactory for Hong Kong, but it is not possible to be absolutely sure in this regard until more experience has been gained on how the Regulation will actually be implemented. The most important area in which it seems likely to affect Hong Kong are instances where the import into the E.E.C. of the product concerned is liberalised from Hong Kong but not from other countries (e.g. Japan, Mainland China) where Hong Kong is likely to obtain components or
materials.
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(d) The Common Agricultural Policy (C.A.P.)
Although the C.A.P. is a very important element of the common commercial policy it has only a marginal effect on Hong Kong because of the concentration of Hong Kong's exports on manufactured
/goods.
CONFIDENTIAL
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