TNAG-0139-FCO40-175-Effect-of-EEC-common-commercial-policy-on-Hong-Kong-exports-1969 — Page 58

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G.F. 323

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- 8.

e Common Commercial Policy

20. poli

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Common origin rules

For the same reasons that the Community must adopt a common. towards quantitative restrictions and towards abnormal trading practices, it must also adopt common regulations regarding certificates of origin.

21.

The present certification requirements imposed by the Member States for imports from Hong Kong are

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by Belgium, Luxembourg and the Netherlands a certificate based on standard Hong Kong requirements for the products listed in appendix 1;

by France

a certificate based on a 50% Commonwealth content for the items listed in appendix 2;

by Italy and West Germany a certificate based on standard Hong Kong requirements for all items.

The standard Hong Kong requirements are that that the goods concerned shall have undergone in Hong Kong a manufacturing process which has changed permanently and substantially the shape, nature, form or utility of the basic material used in manufacture. In the very few cases where this requirement cannot be said to apply (e.g. beaded sweaters when beading is the only process carried out in Hong Kong), certificates are issued if 25% of the manufacturing cost of the finished product can be attributed to work done in Hong Kong or to local materials.

22.

Thus, not only must the Community adopt common criteria, but it must also produce a common list of Hong Kong goods requiring certificates. Nothing has been done to achieve that latter. But the Commission have placed a draft regulation on a common definition of the origin of goods before the Council. Article 1 of the proposal states that the Regulation defines the origin of goods for the purpose of uniform application of

(a) the common customs tariff, quantitative restrictions and all

other measures concerning the importation of goods adopted by the Community;

(b) all measures concerning the exportation of goods adopted

by the Community or by the Member States.

Article 5 defines the criteria to be applied to products for which two or more countries have been involv d. The E.E.C. proposal is that such products should be deemed to originate in the country in which the final, substantial and economically justified processing or working took place, provided that such processing results in an entirely new product or provided that it represents an important stage in the manufacture of the article. An Origin of Goods Committee should consider cases where the process is not clearly established, and should draw up, paying due regard to the value added in the country whose origin is claimed, what the proposals term "implementing provisions". The Commission considered making lists of processcs deemed to confer origin but concluded that to do so would involve lengthy studies which might only produce uncertain results. The Commission also considered the possibility of having only an added value criterion but rejected the idea on the grounds that it would encourage countries exporting to the Community to use semi-finished products bought at abnormally low prices.

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CONFIDENTIAL