TNAG-0281-FCO40-317-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster-to-Hong-Ko-1970 — Page 83

CONFIDENTIAL

The question of which countries should be beneficiaries under this scheme

has not yet been decided. We have recently made representations to the USA,

EEC and Japan that Hong Kong should be included. At present Japan seems to

be determined to exclude Hong Kong. The United States and EEC, while still

Il seeing great difficulty in including Hong Kong, have not closed the door

finally. Under their existing offer, the EEC propose that no one developing

country should be allowed to supply more than one half of the yearly quota

1.

ceiling for any product. They have been considering adopting a lower figure

for certain competitive developing countries, such as Yugoslavia, but have so

far been reluctant to accept even this arrangement for Hong Kong.

Nevertheles

there are recent indications that the Commission may be asking the Six to

agree to the inclusion of Hong Kong in principle by means of some special

.. arrangements, giving little significant benefit to Hong Kong but leaving the

door open to improvement in the course of our entry negotiations. The United

States claim that they will be ready to include Hong Kong if the EEC do so.

-:

16. We must clearly seize any opportunity of persuading the Six to include

Hong Kong even if this is initially on a very restricted basis and to leave

the way open to improved treatment when the generalised preference scheme

1

comes to be adopted on a common basis by the members of an enlarged Community.

We believe that this could best be done by an approach to the Six in the

context of our entry negotiations to consider the problems of Hong Kong as a

whole, including not only tariffs but also quantitative restrictions under

the Common Commercial Policy. The basis of such an approach is set out in

paragraph 19 below.

QUANTITATIVE RESTRICTIONS

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17 The Community are still in the process of evolving a Common Commercial

Policy in the field of quantitative restrictions. At the present time, France

maintains a considerable range of restrictions against Hong Kong exports in

breach of GATT. These cover such items as footwear, umbrellas, batteries,

radios, toys, photographic equipment and tablewear as well as textiles. None

CONFIDENTIAL