Foreign Office,
May 24th 1904.
475
My dear Pearson,
1
My opinion on your questions is as follows:- Bounty-fed Sugar pays a countervailing duty in Hong Kong (at figure fixed by Commission) is refined there, and is re-exported to Java or Indo-China.
So long as the Countervailing duty is not refunded on exportation this refined sugar must be admitted at lowest rates in all Conventional Countries.
The same for Bounty-fed sugar refined in France.
3.
In England prohibition is a guarantee just as good; and all refined Sugar from England enjoys lowest rates of duty - and would be so equally if we adopted Countervailing duties, so long as Countervailing duty were not refunded on exportation.
4. Manilla Sugar refined in Hongkong. Is entitled to lowest rates of duty, until commission decides there is a Bounty on Manilla raw Sugar; and thereafter if the countervailing duty fixed by the Commission is imposed in Hongkong, and not refunded on exportation.
I think the argument is clear. The Countervailing duty being in terms of the Convention not less than the Bounty by the application of that duty anywhere, the sugar becomes "eo facto" non-bountied.
Yours
(intd) H.G.B.