TNAG-0250-FCO40-286-Discussions-on-EEC-negotiations-between-officials-of-Hong-Ko-1970 — Page 82

posed problems of duty quota calculation.

If

all Hong Kong performance was included in the

calculation basis while the 20% cut-off ceil-

ing limited her duty free access, this too

would mean increasing the access for her

rivals. It was agreed that information should

be sought on this at the appropriate time.

Sir J. Cowperthwaite made it clear that Hong

Kong preferred a high cut-off point and a

long list of sensitive items rather than a

short list and a low cut-off. Mr. Jones added

that Hong Kong's real sim, as with the pro-

posals to the US, was in duty free access for

existing trade. Mr. Hannay said that the BBC

had originally considered treating Hong Kong's

performance as the basis for her partial futy

free quota, but had now switched to the idea of

a cut-off within the general duty quota for

all beneficiaries. They also placed Impcr-

tance on Hong Kong operating the quota from

G end; this would be helpful presentational-

ly vis-a-vis the 034. Sir J. Cowperthwaite

agreed that this did not present eny protle:

8. On paragraph 3 (iii), the Governor and

Sir J. Cowperthwaite both expressed their

bafflement at exclusions on Rules of Origin

grounds, which they said were far more doubt-

ful on these items as manufactured in Taiwan

and South Korea. Possible explanations of-

fered for this action were, that either the

Yaoundé rules of orgin were inadequate for

sophisticated manufactures, or that it was

simply a device to exclude a major producer of

these items without having to increase te

list of sensitive items and duty quotas. Sir