"
ing suit.
CONFIDENTIAL
Whatever partial deal is suggested to the
EEC should also be available to the USA.
(c) Japan. The most negative reactions to our representa-
tions have come from Japan, which takes only 3.4% of
Hong Kong's exports (0.5% of total Japanese imports)
and in 1969, enjoyed a trade surplus with the colony of
US.8546,million. Japanese excuses have varied widely,
and hardly bother to conceal the basic fact that
(i) Japanese textile firms would not tolerate
any concession to Hong Kong exports.
Japan would feel obliged to increase her
(ii)
list of sensitive items were Hong Kong
included as beneficiary.
It is of course also possible that Japan would in any
case wish to exclude Hong Kong from her preferences
scheme simply to ensure that the Americans did the
same. This would effectively damage a trading rival in
the US market. In view of this, our approaches to the
Americans should emphasise that it would be unreason-
able of them to insist on a Japanese contribution as a
pre-requisite for the grant of American preferences to
Hong Kong. The only faint possibility of shifting the
Japanese lies with the exclusion from preferences of
Hong Kong textiles, though we would require the colony's
inclusion for other items (to whatever extent may prove
mutually acceptable).
(Defensive) Contingency plan
3.
If the worst happens, and Hong Kong does not secure inclusion
in any donor preference scheme, there will obviously be pressure
3
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