K F X Burns Esq
Trade Policy Department
Foreign and Commonwealth Office Great George Street
LONDON SW1
132
Department of Trade and Industry
1 Victoria Street
LONDON SW1
4 May 1971
Dear Kevin,
HONG KONG
REF.
131
NEW
REF.
In reply to Tokyo telegram number 323, we should like you to consider including the following additional points.
2 We would be very concerned if the Japanese Government were now to decide to exclude Hong Kong from their preferences scheme, or to include her only on a nominal basis, when we had been led to believe that our arguments in support of Hong Kong's claim to be a developing country had been accepted. We have not received any presentation of Japan's replies to these arguments.
3 We have explained a number of times that discrimination in the Japanese market in favour of Hong Kong's Far East competitors at the expense of Hong Kong would threaten grave injury to the Colony's present and future trade and would introduce a discrimin- atory element into international trade that would be incompatible with its healthy development. It would also be difficult to reconcile such a move with Japan's standing as one of the largest and most powerful trading nations in the world and with Japan's own declared interest in the further liberalisation of world trade, in particular the trade of developing countries.
4 An adverse decision might also have the effect of inducing the United States to exclude Hong Kong altogether from their scheme. Hong Kong would then have to face discrimination in favour of her many competitors amongst the developing countries in her most important market. While those Japanese industries that export goods other than textiles and footwear to the United States would no doubt welcome the exclusion of Hong Kong from the US scheme, the protection of the exports of developed countries is wholly contrary to the objectives of the generalised preferences scheme.
CONFIDENTIAL
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