CONFIDENTIAL
060232
MDTTAN 8458
INVESTMENTS IN THE US ARE CAPTURED IN THE US EXPORT STATISTICS RATHER THAN IN THE STATISTICS OF THE COUNTRY PROVIDING THE INVESTMENT. SIMILARLY, THE FACT THAT SOME OF CHINA'S EXPORTS ARISE FROM INVESTMENTS MADE BY HONG KONG BUSINESSMEN, OR INDEED ANY FOREIGN INVESTMENT INCLUDING FROM THE US, IS NOT A RELEVANT FACTOR. OUR TRADE IN TEXTILES AND GARMENTS PROVIDES A GOOD EXAMPLE OF THE IMPORTANCE OF ADHERING TO THE COUNTRY OF ORIGIN RULES. THE US ARE THE FIRST TO COMPLAIN ABOUT ANY SUGGESTION THAT GOODS MADE IN CHINA MIGHT BE COVERED BY HONG KONG QUOTA, AND
RIGHTLY SO.
6. WE MUST DEPLOY THE ARGUMENTS IN PARAGRAPH 5 ABOVE WHENEVER NECESSARY. BUT I AGREE WITH PATTISON'S ASSESSMENT THAT THE TACTIC MUST BE TO FOCUS ON THE FACT THAT MFN IS SIMPLY NOT THE RIGHT TOOL TO USE IN ADDRESSING CONCERNS ABOUT CHINA'S TRADE REGIME.
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