TNAG-0281-FCO40-317-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster-to-Hong-Ko-1970 — Page 85

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retaliation against the EEC, and we are advised thatze--cannot-itgally-retaliate

they belate. In the last resort therefore, we cannot be sure that we can

persuade the Six not to introduce a common system of quantitative restrictions

on llong. Kong before we join the Community. As this will then form part of their

Common Commercial Policy, they will at some stage ask us to state our readiness

to apply it once we are members.

It

19. Such a request would present us with a difficult problem. It would involve

us acquiescing in the application of restrictions which we considered to be

inconsistent with the GATT against a country which would still be a British

dependency. (It would not be a contravention of the GATT by the United Kingdom

to apply restrictions to Hong Kong since the GATT does not create rights or

obligations between metropolitan powers and their dependent territories.

would be quite contrary to our former practice and precept). On the other hand,

we must recognise that in principle all members of the enlarged Community will

be expected to conform to the Common Commercial Policy and in general we must

agree to do so. It would seem desirable to try to forestall such a situation

by opening discussions with the Six on the future regime for Hong Kong at a

fairly early stage in our entry negotiations, and an informal hint was volunteered

at the recent trade talks in Geneva that the EEC were now tending to regard Hong

Kong, like New Zealand, as a problem to which the United Kingdom would require

some special solution to be found. We whould take the line in such discussions

that the problems of Hong Kong in relation to the enlarged Community must be

discussed as a whole, including both tariffs and quantitative restrictions.

Although we may recognise that no form of association is likely to be offered,

we should not lightly concede that a dependency of the United Kingdom should be

denied the same treatment as the Six gave to all their dependent territories.

We should argue that it is essential that at the very least Hong Kong should

obtain some worthwhile benefit from the UNCTAD generalised preference scheme

as it will be applied by the enlarged Community. We should also aim in such

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