TNAG-0281-FCO40-317-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster-to-Hong-Ko-1970 — Page 17

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frequent changes of policy involved would give rise to a good deal of uncertainty in the trade. He felt that Hong Kong had a right to ask that the status quo maintained in the United Kingdom until the outcome of the EEC negotiations became clearer.

8. Mr. Rippon said that on that basis it could perhaps have been argued that nothing should have been done since 1961. The decision on textile tariffs had been taken by the previous Government and had yet to be reviewed by the new one: but he thought its reversal unlikely. He appreciated the dangers of trade disruption, for the Lancashire industry as well as Hong Kong, of short-term policies but foresaw no danger of Hong Kong having to face both tariffs and quotas before British entry into the EEC; and only then if the policy of the enlarged EEC still demanded it by the end of the transition period.

9. Mr. Cater mentioned that he had recently read reports both in the Financial Times and the Economist to the effect that Lancashire industrialists would prefer to retain quotas for the present in view of the difficulties which they had met in reorganising their industry. Mr. Rippon said that, conversely, some people to whom he had spoken in Hong Kong were of the opinion that it would be better to have a tariff rather than quota restrictions in view of the fact that Hong Kong would be able to expand exports as a result of its well-established position in the market.

10. The Chairman felt that the problem would probably resolve itself. By nearer to 1972 it should be possible to see how the enlargement negotiations were going and Her Majesty's Government would then be able to adjust their policy accordingly.

Britain's entry into the EEC

11. Mr. Rippon said it was important to remember that the policies of the enlarged Communities might well be different from those of the Six. In fact, the doubts of some of the present member States of the benefits of British entry stemmed from the fact that they were afraid Britain and the Scandinavians would alter the balance of power and wield strong influence over policies within the Communities.

12. In answer to a question by Mr. Gordon, Mr. Rippon said that British public opinion on the question of joining the European Communities fluctuated considerably Many people were facing up to the realities of the situation, but were anxious that Britain should not court a third rebuff. Although there was recognition of the political and economic benefits of European integration, there was a reaction against the expected short-term increase in the cost of living. Because the period of uncertainty was worrying to the people, Mr. Rippon was of the opinion that negotiations should be brought to as early a conclusion as possible, one way or the other.

13. Sir S. N. Chau said that if Britain had to apply the CET to Hong Kong products, Hong Kong would suffer greatly increased competition from Taiwan, South Korea and other countries of South-East Asia. Mr. Rippon replied that much depended on whether or not Hong Kong was made a beneficiary under the General Preference Scheme. Mr. Cater pointed out that textiles still accounted for 48 per cent of Hong Kong's exports and thus the General Preference Scheme could not assist more than 52 per cent of Hong Kong's exports, Britain having excluded textiles from her offer.

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