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Dear
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BOARD OF TRADE
Commercial Relations and Exports Department,
1 Victoria Street, London S.W.1
*Petexx25955 Answer Back: BOTHQ LONDON
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8 July, 1969
Hong-Kong : Preference on Indian Tobacco
You may already know that representatives of the Indian High Commission called on us recently to leave with us an Aide Memoire (of which a copy is enclosed) relating to Hong Kong's treatment of tobacco imports from India. This is, I believe, largely being handled by the Hong Kong side of your office.
You will see, however, that the Indians are basing their case on the provisions of Article 8 of the Anglo-Indian Trade Agreement, 1939, under which certain obligations towards India in respect of preferences were assumed by the Governments of the non- self-governing Colonies. Obviously, the validity of their case depends upon their contention that this Article is relevant in the present situation, where the removal by Hong Kong of the tobacco preference for all Commonwealth countries except Malawi wa one of the results of the Kennedy Round of G.A.T.T. negotiations. What precisely happened in the final stages at Geneva is a little obscure, and it is not certain that any steps were taken specifically to bring to the notice of the Indians the fact that this particular exception in favour of Malawi had been made, although it seems equally clear that the final schedules were available to all Contracting Parties. The position may therefore simply be that, by their acceptance of those schedules this is an item which the Indians have let go by default, and that this rather belated reference to the 1939 Trade Agreement cannot now help them.
It would, however, be useful to have the opinion of your Legal Advisers on this point. So far as we are concerned in our bilateral dealings with the Indians, we have always taken the line that concessions negotiated in a G.A.T.T. context supersede- preferences accorded under the Trade Agreement; but this is in the assumption that the contractual nature of those preferences has been allowed for in the price paid for the concession (either directly or overall). I suppose that the Indians could conceivably argue that as the tobacco concession was negotiated between two other parties without reference to their contractual right, and without their being made expressly aware that preference was to be retained in respect of Malawi, they cannot be held to have given up that contractual right, despite their signature of the relevant Kennedy Round document.
I should be grateful for your views on this question, which is obviously going to be of some importance in deciding what action can be taken in relation to the Aide-Memoire.
RECEIVED IN
Your
eve
5.01
M
25 AUG 1969
T. D. O'Leary, Esq.,
South Asia Department,
аккорд
Foreign & Commonwealth Office, LONDON, S.W.1.
CHISS M.V. MUSKETT)