TNAG-0248-FCO40-284-Effect-of-entry-of-UK-into-EEC-on-exports-from-Hong-Kong-1970 — Page 42

Mr Laird

Reference

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Negotiations with the EEC

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Affect on Hong Kong

Talks were held in London between British and Hong Kong officials on 10-12 July, 1967 and 24-25 October, 1967 to consider how the question of Hong Kong should be handled in negotiations by Britain for membership of the EEC.

2.

At those talks, the following possibilities were

discussed:

a. associate status

b. Morocco-type protocol

c. general decalage including reduction

of UK tariffs vis-a-vis the Six

d. declaration of intent by HMG e. treatment as a special case f. passive action

3. After full discussion it was considered that gradual application of the common external tariff to Hong Kong and a declaration by means of a statement in Parliament of Britain's continuing responsibility towards her dep- endent territories would be the most that Hong Kong could hope for. So far as negotiations with the EEC were con- cerned, it would probably be best to say nothing about Hong Kong since, if special arrangements were sought for her, the EEC might demand safeguard measures in return. If Britain said nothing to the Six about Hong Kong, the Six would almost certainly raise the question themselves which should put them in the position of demandeurs thereby giving Britain a tactical advantage.

4. In regard to the GATT, there were two possibilities:-

5.

a. To give Hong Kong full autonomy in the conduct

of her commercial relations in which case she could become a Contracting Party in her own right under Article XXVI, 4(c).

b. To have the GATT applied de facto to Hong Kong.

The territory would still have to acquire the "full autonomy" required for Contracting Party status but instead of opting to be deemed a Contracting Party it would be given time to consider its relationship to the GATT and while it was doing so the GATT was applied de facto in trade relations between that Territory and the Contracting Parties.

The Hong Kong Government had decided in general that they should not ask Britain to make any specific demands to the Six on Hong Kong's behalf. If Britain decided that she would accept a straightforward arrangement for the progressive application of the c.e.t. to Hong Kong's exports, Hong Kong would not object. But they would hope, in that case, that Britain would seek the longest transitional period obtainable.

6. From the above it is difficult to recommend the line which we should take with the EEC on behalf of Hong Kong. Not only does Hong Kong prefer that we should say nothing to EEC about them, but also we do not yet know fully

/what .