CONFIDENTIAL
BRIEF FOR MR. ROYLE'S VISITS TO TOKYO AND HONG KONG
GENERALISED PREFERENCES: HONG KONG AND JAPAN
An Aide Memoire expressing HMG's concern at the possible
exclusion of Hong Kong was handed to the Japanese Government
in August. This has been followed up by conversations
between officials in Tokyo and Geneva and by a personal
message from the Secretary of State to the Japanese Foreign
Minister delivered on 12 September. The Japanese have told
us that a decision to exclude Hong Kong has already been
taken (they have subsequently said that the matter is still
under consideration) ostensibly on the grounds that Hong Kong
is a territory and therefore the responsibility of the metro-
politan power. Our view is that this is merely a device to
exclude certain areas which the Japanese consider to be a
threat to their domestic industry.
2. The following points are relevant if Hong Kong were to
be excluded from the scheme:-
(a) Hong Kong is without natural resources and is therefore
dependent on the export of manufactures. It is conse-
(b)
quently particularly vulnerable to trade restrictions.
If duty free entry were enjoyed by Hong Kong's
competitors, the competitiveness of Hong Kong's products
would be reduced and, in some sectors, nullified.
CONFIDENTIAL
/ (c)
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