TNAG-0249-FCO40-285-Effect-of-entry-of-UK-into-EEC-on-exports-from-Hong-Kong-1970 — Page 139

CONFIDENTIAL

duty quotas. It appears likely that this will apply to

cotton textiles (but only about 15 per cent of Hong Kong's

trade in non-cotton textiles), footwear, portable radios

and cutlery, thus accounting for the major part of her

trade. Nevertheless the automatic increases in the quotas

will enable other developing countries to make inroads

into Hong Kong's trade.

C. The Common Commercial Policy

15. The Community has not yet made much progress in establishing

a Common Commercial Policy as regards quotas, but they are

now working at it. They have established common

liberalisation lists, which is all to the good.

One way

in which the Commission are proposing to bring the

quantitative restrictions of the Six into line with each

other is by a sector approach. The Commission have so far

made proposals for a common system of quotas for the

ceramics, footwear, cutlery, ballbearings and umbrella

industries, but the Council have not yet reached a decision

on any of these proposals. France maintains a considerable

range of restrictions against Hong Kong exports in breach

of GATT, and we are not happy with the prospect that some

of these illegal restrictions should be adopted by other

Member States even if some of the other products are

liberalised by France.

16. As regards cotton textiles, the Commission is now entering

into negotiations with Hong Kong for a single list of

restrictions under the Long-Term Agreement for Cotton

Textiles.

/a.