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will shortly go to President Nixon and it is expected to be given its final polish at a meeting on May 4th. The final submission is expected to be "disagreed" on a few remaining issues and these include the important questions for us of Hong Kong and the exact way in which the "abolition of reverse preferences" condition should be expressed. Subject to these unresolved issues the intention is that as soon as the submission has been approved the State Department will start serious lobbying with key Congressmen; and the bill will be published around 1 June. Cronk visualises that the details of the bill will be finalised within the next two weeks. Samuels will then undertake initial contacts with Congressional leaders which will be followed up if necessary by Secretary Rogers. Then, once the bill is published, the hope is that in advance of Committee hearings there will be informal consultations led by Trezise with Ways and Means Committe and Finance Committee staff. All this sounds very impressive but it is by no means clear whether either Chairman Mills or Senator Long will be open to persuasion. Congressman Mills has, as you know, committed himself to the proposition . that he will not allow his Committee to consider trade legislation of any kind until he is in control of the situation and that this requires a textiles settlement. Bob Best, a senior staff member of the Senate Finance Committee, told me flatly last week that there would be
no trade legislation this year.
5. As regards the shape of the Administration's proposed bill the broad intention remains to implement the UNCTAD offer in full and the hope would be to do so before the end of the year. Both the major unresolved issues of interest to us (Hong Kong and the reverse preferences condition) come together on the question of whether the beneficiaries should be scheduled in the bill itself. The State Department's recommendation is that they should not be scheduled but other agencies appear to be arguing that even if the Administration bill does not do so Congress will introduce a schedule listing the beneficiaries (or at least stipulating the conditions attached to participation) while the bill is on the Hill.
6. As regards Hong Kong the State Department seem to have come down in favour of recommending something along the lines of the EEC's offer (ie excluding "sensitive" items). But even within State there are still differences and our assessment of the likely outcome is not too optimistic. One possibility is that the issue would be deferred and remain open for the time being.
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7. As regards the reverse preferences condition it is important to stress that there is complete unanimity that beneficiaries must phase out all preferences they give
against the United States by 1975. The dispute (and it
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