CONFIDENTIAL
WITH SATO IN NEW YORK LAST AUTUMN MITI HAD BEEN TOLD TO
RECONSIDER HONG KONGS EXCLUSION BUT JAPANESE INDUSTRY WAS NOT
INFORMED UNTIL FEBRUARY THIS YEAR. SUBSEQUENTLY MITI HAS BEEN
SUBJECTED TO VERY STRONG PRESSURE FROM JAPANESE SMALLER INDUSTRIES.
2. MITI WERE STILL PLAYING WITH THE IDEA OF TWO STAGES OF
ANNOUNCEMENT OF BENEFICIARIES UNDER THE SCHEME. THIS HAD BEEN
BORROWED FROM AN EEC PLAN TO DECIDE ON A SECOND GROUP OF
BENEFICIARIES SUCH AS CERTAIN EASTERN EUROPEAN AND LESS DEVELOPED
WEST EUROPEAN COUNTRIES AT A LATER DATE, UNDER THIS PLAN HONG
KONG WOULD NOT BE MENTIONED IN THE FIRST LIST OF BENEFICIARIES BUT
WOULD BE INCLUDED IN A SECOND LIST AFTER A DELAY OF FOUR
OR FIVE MONTHS. OHTAKA SAID THAT THE ADVANTAGE OF THIS MIGHT
BE THAT THE PRODUCT EXCLUSION LIST FOR HONG KONG WOULD THEN
BE SHORTER. WE SAID THAT WE DID NOT UNDERSTAND THE REASONING
FOR THIS AND DISLIKED THE IDEA OF POSTPONING THE ANNOUNCEMENT
HONG KONGS INCLUSION.
3. OHTAKA SAID THAT MITI HAD PREPARED A LIST OF EXCLUDED
PRODUCTS FOR HONG KONG BUT HAD SO FAR REFUSED TO TABLE THIS.
THIS LIST WAS HOWEVER KNOWN TO BE LONG. IN THE CASE OF KOREA
FOR EXAMPLE, RAW SILK, SILK FABRICS AND PLYWOOD WOULD BE
EXCLUDED. MITI WERE HOPING TO COMPLETE THESE LISTS BY THE END
OF THE MONTH, ACCORDING TO PRESENT THINKING PAPAUA, NEW GUINEA,
SURINAM AND DUTCH ANTILLES WOULD NOT BE INCLUDED IN THE SCHEME.
4. WE SAID THAT THIS UNGENEROUS TREATMENT OF HONG KONG WAS
OUT OF KEEPING WITH THE STATEMENT MADE BY THE PRIME MINISTER
AND WAS ALSO CONTRARY TO THE LIBERAL PRONOUNCEMENTS ON
JAPANESE TRADING POLICY WHICH THE JAPANESE GOVERNMENT HAD BEEN
MAKING OVER THE PAST FEW WEEKS, WE REFERRED TO OUR REPEATED
REQUEST THAT HONG KONG OFFICIALS SHOULD BE INVITED TO JAPAN
- 2 - CONFIDENTIAL
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