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CYPHER CAT/-A
P/MEDIATE GOVERNOR HONG KONG
TO TOKYO (TIME FACTOR)
31/10
FES
MAR2/30
(DTI)
CONFIDENTIAL 3003302
F.C.C. TELEGRAM 738 TO ME: PREFERENCES.
TELEGRAM NO 51
ADDRESSED TOKYO. TELNG 51 OF 32 OCTOBER REPEATED F.C.0., UKDEL
BRUSSELS, WASHINGTON AND UKMIS GENEVA,
CNEVTRAL
275
DATED 30 OCTOBER 1970
R.C
REFERENCE TO TARIFF ARRANGEMENTS CAN ONLY BE UNDERSTOOD IN TERMS OF OUR VERY FEW COMMONWEALTH PREFERENCES, 1.E. FOR CARS, LIQUOR AND TOBACCO. JAPAN HAS AN INTEREST IN CARS AND BEER.
IT COULD ALSO REFER TO REQUIREMENT THAT BUS COMPANIES BUY BRITISH VEHICLES ALTHOUGH THIS IS NOT ABSOLUTE, GOVERNOR IN COUNCIL HAVING POWER TO EXEMPT (RC APPLICATION FOR EXEMPTION HAS EVER BEEN MADE).
2. AS TO YEN, THERE IS A SMALL MARKET HERE IN YEN NOTES BUT SINCE JAPAN NOW TERMITS IMPORT OF NOTES THE EXCHANGE RATE MERELY REFLECTS NORMAL DISCOUNT FOR NOTES AND THE CONVERSION CAN HARDLY AFFECT TRADE, VIRTUALLY ALL OF WHICH 15, IN ANY CASE, CARRIED OUT
IN U.S. DOLLARS GR STERLING.
3. AS TO (B), OUR GRIGIN GERTIFICATION APRANCEMENTS PRECLUDE DISGUISING OF JAPANESE ECCES AS CF HONG KONG ORIGIN AND, IN ANY CASE EVEN IF SQ TISGUISED, THEY COULD HARDLY COUBT AGAINST JAPANEGE QUOTAS. IT IS TRUE THAT WE HAVE A CONSIDERABLE OVERT RE-EXPORT TRADE IN JAPANESE GOODS AND THAT WE USE SUBSTANTIAL QUANTITIES OF JAPANESE SEMI-MANUFACTURES (INCLUDING PIECE GOOTS) FOR MANUFACTURE FUR EXPORT. BUT THIS IS VERY MUCH TO JAPAN'S /DVANTAGE AND IS
ENCOURAGED BY HER. INDEED, IF WE ARE NOT ACCORDED GPS BY U.S. ANDE E CANT OUR TRADE SUFFERS, CUR CURCHASE OF JAPANESE SEMI-MANUFACTURES IS LIKELY TO FALL SUBSTANTIALLY TO JAPAN'S
TETRIMENT.
3x 'T SEEMS TO ME THAT THESE ARE NOT SERIOUS ARCUMENTS HOT MERELY
ARTI
ESTRUCT.