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that (a) they would probably accept as beneficiary countries all countries except the U.S., the developed countries of Western Europe, Australia, New Zealand, Japan and South Africa, (b) they would concede a substantial cut in tariffs across the board with few exceptions (i.e. along the lines of the Swiss proposal) and (c) on safeguards they would adopt the serious injury criterion of Article XIX of the GATT with prior consultations, if possible.
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This seems to indicate that the Canadians, at least, do not as of now contemplate the exclusion of Hong Kong.
Japan
I
10. Although there was nothing concrete said, I did get the impression that the Japanese were moderating somewhat their pressures against Hong Kong. This may possibly be a consequence, at least partially, of the battles we have had with them on past occasions and my continued reiteration of the significance of their very favourable bilateral trade balance with Hung Kong and their recent appearance as Hong Kong's chief supplier. did a little more softening up on these lines with their chief delegate (Miyazaki). He was fairly reticent but added the (perhaps significant) comment that, apart from their own industries, they had to take account of strong political feeling in some quarters in Japan for closer ties with mainland China and the difficulty of their balancing act between China and Taiwan. I added that they should also pay some attention to their growing economic interests in Hong Kong and Miyazaki assented to this.
Despite
this conversation I remain of the opinion that, even if they change their views on Hong Kong quite a bit, we cannot really expect the Japanese to do a complete about-face and to start campaigning positively in favour of Hong Kong's inclusion. The best we can expect is that they will be more neutral from new on, which will not be of much help in view of their previous "anti" campaign. I showed to Goldsmith the FS's memorandum his conversation with Ohtadi, but he did not feel that it significantly altered the position. He considered that on this question the views of
Japanese industry and the MITI would prevail.
on
He, discounted the information
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