TNAG-0132-FCO40-168-Tariff-preferences-for-developing-countries-1969 — Page 27

CONFIDENTIAL

MEMORANDUM

From:

Prodrome, Geneva

No. 8/69

To:

Reference:

Dated:

Candihong, Hong Kong

GVA/10/8

17 January 1969

Preferences: Hong Kong's Fosition

I am preparing a separate memorandum reporting on the formal

proceedings at the meeting of the OECD Ad Hoc Working Group on Preferences on 13 and 14 January. This memorandum sets out further impressions I

have gained on Hong Kong's position. It is written after reading A.L.'s memorandum No. 19 of 8 January.

2. As I see it, the key to the whole issue lies in the attitudes which

are finally adopted by the EEC and the United States. These two markets

are so large (particularly for Hong Kong) that what is done by e.g. the

Nordic countries, Switzerland, Canada, Austria, etc., will be

quantitatively of little importance.

Furthermore, in this instance I

doubt whether these tails will wag the two big dogs but that rather, if both the EEC and the U.S. were to exclude Hong Kong, some, and perhaps most, of the others would tend të fall into line, if only on grounds of burden-sharing.

3.

I would also at this stage somewhat discount any change in the

Japanese attitude, even if it has taken place, which is problematical (but see below). I doubt whether what the Japanese say one way or the

other on the position of Hong Kong will now have very much influence on

either the Americans or the EEC, especially as both of them must be

fully appraised of H.M.G.'s feelings in the matter. Even if the Japanese

釁

attitude on this issue has recently become more neutral, the major factors

bearing on the policies of the two giants will still be

(a) internal considerations, and

(b) political anxiety to present to developing countries as a whole

a scheme to which they will at least give some degree of welcome.

CONFIDENTIAL

/EEC