TNAG-0237-FCO40-273-Trade-relations-between-EEC-and-Hong-Kong-1990 — Page 104

C. & I, 368 2700482

60x100-4/68-B64509

To: Director of Commerce and Industry, Hong Kong.

Counsellor (Hong Kong Affairs), Geneva. From: Counsellor for Hong Kong Commercial Affahs; Geneva:

Memorandum No. 24/70

File No. QVA/4/20

34)

Date 10 February 1970

GATT

EEC Association Agreements

I enclose for your background information a copy of UKMIS, Geneva, telegram No.14 3aving of 6 February reporting on the meeting of the GATT Working Party on EEC Association Agreements with Tunisia and Morocco.

2. This particular Working Party introduces another Chapter in an argument which has been going on now for some twelve or thirteen years. The first GATT meeting I ever attended, in February, 1958, was the "Working Party on the Association of the Overseas Territories with the uropean Rocnomic Community under Part IV of the Treaty of Rome". That Working Party held two sessions covering a total of about five Weeka. It examined in great detail, commodity by commodity, the likely effects of the association and produced what must be one of the longest GATT Reports ever. But the arguments were essentially the

as now, namely, the doubtful compatibility of the arrangement with Article XXIV of the GATT. There was fundamental disagreement on thia between the EEC on the one hand and most other members on the other but, true to GATT traditions, the legal issue was set aside and never resolved in direct confrontation.

3. Since then association agreements between the EEC and other countries have proliferated, and the compatibility with the GATT of some of the recent additions is becoming more and more doubtful. It might be recalled, for instance, that the Greek association of 1961, although it has a very long transitional period of twenty two years, doee provide eventually for the establishment of a customs union with the Community. The Turkish agreement, which came later, did not even at first provide for a transitional period, but only for a "preliminary stage" of five years during which the EEC granted certain preferences and financial aid to Turkey. The possibility of moving to the trans- itional stage is now being studied following which there will doubtless be another twenty to twenty-five years to go before we see a full customs union - if we are lucky that is. This sort of delay is certainly not what the drafters of the GATT had in mind when they drew up Article XXIV. The arrangements with Nigeria and East Africa, neither of which have come into force as yet, provided for the EEC to receive preferences in these countries on a limited number of items of special trading importance for them. Special tariffs were to be created for this purpose in order to try to get round the technical requirements of Article XXIV while completely ignoring its spirit. the arrangements with Tunisia and Morocco are, if anything, even more doubtful.

Now

4. Currently there are two Working Parties meeting or due to meet to consider association arrangements, namely, this one on Tunisia and Morocco and another to examine the renewal of the Yaoundé Convention with the associated African and Malagasy States (which replaced the original Overseas Territories Association under Part IV of the Treaty

/of Rome