I. 200
2700206
*~vx100-7/68-B64557
TELEGRAPHIC ADDRESS:**
"CANDIHONG" HONG KONG
CONFIDENTIAL
713/2
COMMERCE & INDUSTRY DEPARTMENT.
FIRE BRIGADE BUILDING,
HONG KONG.
23rd March, 1971.
+
196
OUR REF.:
YOUR REF..
Su TOBIOS
$189-97.
ΧΙ
CR/EIC 1103/¡XI
My dear Owen,
You may recall that when we last met in London, at the meeting chaired by Roy Denman, I asked if the U.S. might yet adopt some sort of ' competitive need' concept for exclusions of product by country. Your answer, as I remember, was that this was unlikely because the U.S. scheme envisaged a reference to the U.S. Tariff Commission to establish injury as the mechanism for operating their safeguard provisions.
2.
I happened to mention this in a letter to Alec Hermann in Washington who has commented
3.
EX
"I seem to remember that during some past discussion of safeguard mechanisms the U.S. representative said that the intention was to rely on the existing escape-clause mechanism which would involve a Tariff Commission injury investigation. But this must have referred to a subsequent total exclusion of a threatened product, and in any case, until legislation is passed, it could only be a statement of intention. The Congress are not, I feel certain, prevented by any existing legislation from providing, in legislation specifically creating preferences, any mechanism they like for excluding particular products or countries or both."
I wonder if I can prevail on you to clear our minds on this. Naturally inclusion in the U.S. scheme and the qualifications thereof remain our prime concern in this sphere. I know it is probably wishful thinking, but eventual acceptance by the U.S. (and others for that matter) of the competitive need concept along Australian lines would, it seems from here, not only serve our interests well but could at a stroke remove a lot of the nastier problems where political commitment and established competitiveness (e.g. Taiwan, Korea, Mexico) exist side by side. I understand the U.S. examined the concept once and rejected it before their scheme went to the White House. One of our State Department contacts has said they may yet have cause to regret doing so when the Administration's Bill goes to Congress.
4.
Now that we are in (so to speak) the E.E.C. scheme, ideally our tactics would be to get the Japanese to make a formal statement of our (albeit qualified) inclusion; and then turn our attention to Washington. The Japanese are, however, being maddeningly slow in agreeing to see us. They say they want to discuss exclusions, but all the Tokyo Embassy's considerable efforts to prod them have failed to produce anything other than a vague "April or May" suggestion; by which time we fear their position may be quite rigid.
/5.