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he took the point but he was nevertheless worried about the effect of liberalisation. The Ministry of Finance would now consider the
possibility of cutting the tariff with all deliberate speed.
2. Mr. Tanikawa referred to the change of Government in Britain last year and wondered whether the new British Government fully endorsed the aims and purposes of the trade talk proposals put forward by the previous Government. Mr. Wakefield said that they
did and this had been made very clear by the then President of the
Board of Trade, Mr. Noble, to the Japanese Ambassador last autumn.
3. Turning to preferential tariffs, Mr. Tanikawa said that the question of including Hong Kong in the Japanese offer had also been discussed at the meeting between the British and Japanese Prime
Ministers in New York last year. He hoped that as a result Hong Kong
would be included but he would welcome clarification on one or two
points. For example was Britain proposing to extend preferential tariff advantages to Hong Kong? Mr. Bottomley replied that in practice the only items on which Hong Kong goods were charged duty on entry into Britain were textiles of man made fibre, and (under the system now proposed whereby quotas from Commonwealth countries would be replaced by a flat rate tariff as from 1 January 1972) on cotton
textiles. Since textiles were excluded from the British offer under
the generalised preference scheme, the question did not arise. Mr.
Bottomley added, however, that if Japan were thinking of excluding textiles from their offer to Hong Kong, then, like Britain, they
should be prepared to include all other items
4.
Mr. Nishizawa said that Japan was looking for arguments to show that economically Hong Kong was in a sense independent of Britain. The Ministry of Finance had been undertaking some research but had found difficulty in obtaining satisfactory material. For example, they could not find figures for Hong Kong's foreign exchange reserves in any of the IMF or UN publications. During the ensuing discussion Mr. Bottomley suggested that it might be appropriate for officials from Hong Kong to come to Tokyo to discuss these and other technicalities. Mr. Nishizawa did not react directly to this but subsequently suggested that the Ministry of Finance would put their questions to us in a consolidated form through the Ministry of
Foreign Affairs.
5.
1
Mr. Tanikawa asked how we saw the prospects for entry into the EEC and, if we entered, what would happen to the Commonwealth
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/preference