Our ref. GVA/5/2
Your ref. 1/1/68-###
UNITED KINGDOM MISS)
HONG KONG OFFICE,
37-39 rue
%/
Vermont,
1202 Geneva.
Tel. 349040
18 December 1968
Dear Mr. Pradhan,
Thank you for your letter of 12 Desember about Hong Kong's Kennedy Boundi. concession to the United States on unsanufactured tobacco. I am consulting the Hong Kong Government about the matters you raise and what fellows is only my personal commentary.
As I recall, the decision to retain preference for Malazi on this product was taken at a very late stage in the Kennedy Bound when matters were moving rather quickly. At that point, the United States Government had decided to withdraw certain itess from their offer which were of considerable interest to Hong Kong and, in view of this, the possibility was considered of withdrawing the Hong Kong offer on unmanufactured tobacco in its entirety. However, in the and the United States accepted that the offer should be modified to extent of retaining the preference for Malawi. As I explained to you, the grounds for this retention were that Malawi was a least developed country whene
The action was recorded teenosy was heavily dependent on exports of tobacco. in Part C (Hong Kong) of the .K. concessions in the Kennedy Round (Schedule XIX), so it was available all delegations at the conclusion of the Kennedy Round,
3. At the end of your letter you ask several questions relating to the original basis on which this preference was recorded to India and the GATT implications of the nation taken. As regards the former, although I cannot be certain, my impression is that the preference was first extended by Hong Kong to the whole Commonwealth at about the time of the Ottawa. Agreements in 1932. It was, however, a non-sontractual preferezos. Hong Kong is a separate sustons territory from the United Kingdom so any contractual sessions made by the U.K. do not necessarily apply to Hong Kong.
As regards the GATT position, I would say that the only obligation on a contracting party as regards non-bound rates of duty is not to establish new preferences. In this osse Kalavi had always boon in recsipt of the preference no no new preference was established by the Kennedy found concession. argument was accepted by the United States delegation at the time. other hand, the effect of making this concession in the Kennedy Round is that Hong Kong is now bound not restore the preference any other members of the Commonwealth.
the
5. You also mention Part IV of the GATT. Høre it must be remembered that Hong Kong, as a developing country, is obligated only by paragraph ↳ of Artisle XXXVII and not by the earlier paragraphs of that Article which only apply to developed countries. The action taken seems to me not to contradiet the terms of paragraph 4 ef Article XXXVII; indeed I can recall that your delegation has been claiming that this paragraph provides cover for the preferential provisions of the Tripartite Agreement between India, the DAR and Iugoslavia, Furthermore, the Hong Kong concession on tobacco was made during the Kennedy Mound, which required some measure of resiprocity from developing countries; and, in my opinion, it must be viewed within that context.
Er. R.D. Pradhan,
Resident Representative of Indi
Permanent Mission of India
2, Place des Saux-Vives, Geneva.
GATT and UNCTAD,
United Nations Office,
16.