TNAG-0139-FCO40-175-Effect-of-EEC-common-commercial-policy-on-Hong-Kong-exports-1969 — Page 50

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G.F. 333

CONFIDENTIAL

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import restrictions, or surveillance procedures, covering the whole Community may be imposed on some Hong Kong exports at present only restricted in France. Alternatively, Hong Kong may be requested to restrain its exports on some of these items to the whole E.E.C. and requests of this sort may be extended at any time to other ems, the import of which from Hong Kong into the Community, Some part of it, is alleged to be causing disruption.

It is, however, also possible that some other Hong Kong exports, which are at present subject to import restrictions in France, may be liberalised under a common import policy.

38.

or

As regards cotton textiles it seems likely that, if the operation of the C.T.. is extended beyond 30th September, 1970 and the E..C. as such becomes a party to it, Hong Kong will be asked to negotiate an Article 4 bilateral arrangement with the Community as a whole. Although the administration of such an arrangement may be subject to procedures similar to those described in paragraph 26 above (i... division of the quotas between Member States and individual negotiations with the on categorisation and administration) it is possible that, by then, the Community may try to bring about more uniform arrangements in order to facilitate free circulation of imports between the Member States and. to do away with the need to make use of Article 115 in this sector. If this were to prove to be the case the terms of an Article 4 agreement with the D.D.C. as a whole may not be as generous to Hong Kong as are at present available in c.g. Germany. But this is something which can only be tested in negotiations.

39.

All these developments could also have an effect on the conditions of any future entry of the United Kingdom into the B.3.C. Subject to any changes agreed in negotiations and to any transitional arrangements that may be established, the U.K. will, on entry, be expected to apply the rules and procedures of the existing Community. This could mean that the U.K. may also be required to subscribe to any policies existing along the lines set out in paragraphs 37 : and 38 above in relation to her imports from Hong Kong, if they have been previously agreed by the existing Community and she cannot negotiate derogations in respect of her own trade.

40.

The above is probably too gloomy a prognostication of what may actually happen. But, in view of the uncertainties involved, a close watch will need to be kept on developments in the E.M.C. in all these fields so that, if required, representations can be made to the British Government in good time.

Members' Advice

41.

(a)

At their next meeting, members will be invited to :

comment on developments in the .J.C.'s Common Commercial Policy as set out above, and particularly those aspects covering a Community policy on imports (see paragraphs 21-25 and paragraph 37 above) and on cotton textiles (see paragraphs 26 paragraph 38 above);

31 and

(b)

note the possible consequences of developments in these policies for the terms of British entry into the ..C. (see paragraphs 32 35 and paragraph 39 above); and

(c)

advise whether they are in agreement with the Depart- ment's line as set out particularly in paragraphs 24, 25, 29, 35 und 40 above.

Commerce and Industry Department, 7th August, 1969.

CONFIDENTIAL