HKIL G/N HK
CYPHER CAT A
ROUTINE UKDEL OECD PARIS
TELEGRAM NUMBER 65
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Mc Kinnear
2.11
Sus Mi Royle's visit to Jeep
be used for putting political
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argmento! Mis
TO FOREIGN AND COMMONWEALTH OFFICE
9 SEPTEMBER 1979
ADDRESSED TO F C O TELEGRAM NUMBER 65 OF 9 SEPTEMBER 1979 RFI TO
HONG KONG TOKYO WASHINGTON UKDEL EEC UKMIS GENEVA,
SEE M.1.P.T. ~
GENERALISED PREFERENCES FOR HONG KONG
KARUDA TOLD JONES THAT IN THE JAPANESE VIEW OUR AIDE MEMOIRE ON
HONG KONG HAD PLACED TOO MUCH EMPHASIS ON ECONOMIC CONSIDERATIONS
AND TOO LITTLE ON POLITICAL FACTORS. HE ADMITTED THAT FORMAL
JAPANESE REASON FOR EXCLUSION OF HONG KONG, THAT SHE WAS A TERRITORY
AND THE RESPONSIBILITY OF THE METROPOLITAN POWER, WAS ONLY AN
EXCUSE, THE REAL REASON WAS THAT THE JAPANESE CONSIDERED HONG KONG
WAS SUFFICIENTLY GROWN UP*** NOT TO NEED PREFERENCES. THIS WAS
CONFIRMED IN THEIR VIEW BY THE STATEMENT IN THE AIDE MEMOIRE THAT
HONG KONG DID NOT NEED PREFERENCES AS SUCH BUT ONLY NOT TO FACE
DISCRIMINATION IN FAVOUR OF HER COMPETITORS. THE ONLY ECONOMIC POINT
THAT WEIGHED WITH THEM WAS THEIR LARGE TRADE SURPLUS WITH HONG KONG
BUT THIS WAS NOT SUFFICIENT WHEN WEIGHED AGAINST THE OTHER FACTORS,
2. IN REPLY JONES SAID THAT EXCLUSION OF HONG KONG BY MAJOR
DONORS WOULD INEVITABLY BRING ABOUT THE DISCRIMINATION WHICH WE
FEARED. THIS WAS A REAL POINT AND THERE WAS A SERIOUS PROSPECT FOR
HONG KONG OF LOSS OF TRADE TO NEIGHBOURING COUNTRIES. SURELY IT
WAS NOT THE INTENTION OF THE PREFERENCES SCHEME THAT THE GRANT OF
REF
PREFERENCES SHOULD BE MORE AT THE EXPENSE OF HONG KONG, THAN OF THE
IMPORTING COUNTRIES OSTENSIBLY EXTENDING THEM. HONG KONG WAS READY
TO ACVBPJ KERNANMPETITIVE CLAUSE IN THE JAPANESE SCHEME (OR ANY OTHER OBJECTIVE PROCEDURE FOR EXCLUSION BY COUNTRY BY PRODUCT)
PROVIDING IT WAS APPLIED TO HER COMPETITORS AS WELL. IN THIS
CONNECTION, IF THE JAPANESE CONTINUED TO EXCLUDE HONG KONG AND
REMOVED THE COMPETITIVE CLAUSE FROM THEIR SCHEME HONG KONG WOULD
BE DOUBLY HIT.
13.
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