31-7406
NOTHING TO BE WRITTEN IN THIS MARGIN
CONFIDENTIAL
BRIEF FOR MR. ROYLE'S VISITS TO TOKYO AND
HONG KONG
Generalised Preferences: Hong Kong and Japan
1. 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
delivered on 12 Sept.
to the Japanese Foreign Minister/ 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
consequently more vulnerable to trade
restrictions than its competitors.
(b) 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.
(c) Hong Kong at present enjoys Common-
wealth preference. The present UK
preference offer of duty free entry
to all developing countries decreases
Hong Kong's trading position, vis-a-vis
close competitors
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