TNAG-0139-FCO40-175-Effect-of-EEC-common-commercial-policy-on-Hong-Kong-exports-1969 — Page 54

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that are not G.A.T.T. member or whose economic structure is not comparable to that of the E.E.C.;

(f) Community-negotiated trade treaties with Iran and Israel

on 14th October, 1963 and on 4th June, 1964 respectively;

g) the Commission's attempt in 1964 to establish a common

commercial policy (i.c. common negative list, community rules for quota administration, the application of a community safeguard clause against market disruption) towards Japan as a prerequisite to the success of the Kennedy Round. The Council failed to agree the content of such a policy, the strongest opposition to this initiative coming from France and Italy whose negative lists are much longer than those of the other Member States. Although the Department's records show no subsequent agreement, we have received reports that in 1965 the Japanese rejected, on the grounds that she already had treaties with each of the Member States, Community moves to open negotiations for a Community treaty;

(h) during 1965 France refused to accept proposals for a common

commercial policy towards East-European countries for which, incidently, the "E.E.C. clause" has never been included in Member States' trade treaties;

(i) in May 1965 the Commission laid before the Council a

proposal, on which the Council have yet to agree, for a regulation on the establishment of a common liberalisation list for imports from non-member countries. The proposal laid down as the ultimate ain complete liberalisation of imports from G.A.T.T. countries; in the meantime a common list of items liberalised to C...T.T. countries (except Czechoslovakia) should be drawn up; as from the date when the common list came into force, Member States should cease to introduce quantitative restrictions on products on the list vis-a-vis G.A.T.T. countries; the list should be amended only on a decision by the Council; if a product were withdrawn from the list, the Council should fix the Community quote applicable to non-member countries;

In

(j) at the same time, the Commission placed before the Council

rules for the gradual introduction of a common procedure for the administration of import quotas negotiated by the Community (i.c. not by the Member States individually). accordance with this proposal which the Council have also yet to accept, the Community would apportion 75% of each quota among Member States on the basis of imports in the previous two years, leaving 25% as the Community reserve to be used for Members with no previous imports and for allocation to other Members on demand. Member States would themselves issue licences, but would be obliged to do so up to the full amount of the quota.

10.

It is clear from this summary that the Council are not moving towards a common commercial policy at any great speed. The possible reasons for this are

(i) their preoccupation with more urgent problems. It must not

be forgotten that the areas or countries in respect of which the E.E.C. must establish such a policy are not important Community trading partners. For example, Japan, the East- European countries and Hong Kong provide only 2.2%, 0.89%, and 0.2% respectively of E.E.C. imports;

(ii) the

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