ECO 6/13
Dear Rae,
158
2.
BRITISH EMBASSY WASHINGTON, D.C.
18 June, 1971
U.S. Generalised Preferences
I refer to my letter of 21 May.
Ivi leteral
95
Para 6 explains
the background to the tel from Washing time about the K. visit!
HKD (M. Land)
HB
25/6
There was a meeting on 16 June of the "Review Group" of the President's Council on Foreign Economic Policy under Mr. Peter Peterson's chairmanship at which this matter was discussed; and I spoke yesterday to Ed Cronk (State Department) and Ernest Stern to find out what happened.
3.
Stem confirmed that the policy "options" on the eligibility of Hong Kong to the proposed U.S. g.p.s., and the "reverse preferences" condition (which particularly affects the Commonwealth Caribbean) remain as set out in my letter under reference. Both he and Cronk indicated that the time-table for the President's consideration of the matter and the introduction of legislation to Congress had slipped still further. Putting their comments together, the indications are that there will be some further White House "processing" of the inter-agency report to the President before it goes forward to him for determinations, but that there will be no further remit to Departments. This may take three to four weeks; and the U.S. g.p.s. Bill will probably be published around the end of July (though this may possibly be further delayed if Ambassador Kennedy's roving commission on textile and footwear restraints meanwhile fails to produce enough to represent a defusing of the relevant protectionist lobbies in Congress).
4.
Cronk hinted (and Stern confirmed) that one major issue on which no agreement had been reached was whether an escape clause could be found that would atisfy Congressional opinion that preference-attracting imports would be stopped if they increased too fast. Otherwise there would be very strong Congressional pressure to go over to an EEC-type "duty quota" scheme. The trigger of the escape clause might well have to be something a lot more automatic than merely a provision for consultations if any country's sales of particular items to the U.S. become "excessive". He also indicated that the State Department were studying the EEC's scheme in detail which may represent either the preparation of a fall-back position from the U.S.'s existing proposals to something more akin to that of the EEC, or simply a precautionary defensive briefing to justify the U.S.'s scheme as compared with the EEC's.
R. G. Britten, Esq.,
Trade Policy Department,
F.C.O.
·1-
CONFIDENTIAL
R. copsy is above
The Guti
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