Dear Rav
CONFIDENTIAL
UNITED KINGDOM MISSION
37-39 rue de Vermont, 1202 GENEVA Telex: 22956
Telegrams: Prodrome, Geneva Telephone: 34.38.00, 33.23.85
6 October 1970
248
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Preferences: Hong Kong
I enclose a minute from Derek Jones in response to information given by Tran to Owen Kemmis to the effect that Wellenstein had asked Di Martino to find a GPS solution for Hong Kong which would simplify this problem in the context of the enlargement negotiations. Di Martino apparently replied that the Six found this impossible.
2.
Since then, Tran and Jones have had talks at the former's request this morning, and these have given more substance to the Di Murtiño reaction. I understand that Jones will be reporting the points arising by telegram, but in brief they amount to a flat Community rejection of our aide memoire and a total refusal to do anything for Hong Kong be- cause of our failure to harmonise our preferences offer with the EEC. The Dutch and Germans are said to have had some qualms about this, but the French were adamant, and insist on dealing with Hong Kong purely in the context of the enlargement negotiations (though there was a passing reference to the possibility of the UK having eight years to phase out 'Hong Kong's preferences in the UK market before applying the full CET). 3. This meeting between Jones and Tran (arranged with discretion but by no means with secrecy) raises several possibilities. One is of course that Tran is acting as a messenger under instructions. I am not clear whether this would suit any Commission purpose. The other is that he may have taken the case of Hong Kong genuinely under his wing, and be giving us reliable inside information. This cannot be discounted. 4. Assuming that the information is correct, it would seem that our aide memoire was rash to link the plea for Hong Kong with an implicit willingness to harmonise offers. However, in our defence itwould be fair to say (for internal consumption) that our effort to kill two birds with one stone was frustrated by lintech, though some caution is re- quired here. Our FCO briefing for Ministers before the EPC meeting to decide the form of our offer did not make the Hong Rong point because it would have cut little ice with Mintech, and indeed might have prompte ed them to ask how we were entitled to make such a bold assumption in our aide memoire without wider Whitehall agreement.
5.
that
Within Whitehall, we might say, I suspect with much justification,
a) an EEC rejection of Hong Kong on harmonisation grounds is a convenient excuse, but in no way a reason, and conversely, b) had we harmonised our offer, the BC would have thanked us kindly and still found it impossible to help Hong Kong. My own feeling is that the French, for pathological more than economic reasons, have an unsurmountable fear of Hong Kong, and that even were these to be proved unreasonable, they see no reason to let us slip long Kong into the GPS context when it is in their interest to make us pay this particular bill to the full in the enlargement negotiations. This assumes that the French wish us to enter the arena laden with as many burdens as possible. It would therefore do little good to point out the economically it is in the Community's interests to give Hong Kong enough in the GPS to get her included in the American offer, because if a greater flows of Hong Kong exports (over the tariff) are diverted from the US to the European market, it lo the Gormans who will suffer most, not France.
1
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