12
J
CONFIDENTIAL
It was suggested at the PCO meeting that there might be advantages in retaliating by excluding not particular countries but particular products, for instance those of particular interest to Taiwan or South Korea, as this could be presented as non-discrimina- tory. In practice however it would be difficult to select products which would not be of interest now or in the future to a very large number of developing countries. Such action by us might also encourage other developed countries to add to their list of exceptions with possible harm to Hong Kong
in some cases.
2. Clearly the minimum we must do is to stand up for
Mr.Tarlton Hong Kong's position in the OECD discussions. is considering what material could be provided to show how Hong Kong compares with her Asian neighbours and in general with the countries which are certain to be included in the preferences scheme. As you know, Hong Kong's living standards/development level are lower than those of certain other developing countries. We can also point out that Hong Kong has an unequalled record as a liberal importer and refer for instance to Japan's large and growing surplus in her bilateral trade with Hong Kong (part of her world-wide balance of payments surplus) which would make protectionist measures highly inappropriate. We must also consider how far lobbying in capitals would be appropriate at this stage. I am doubtful if we are likely to get much further in exchanges with the EEC and am inclined to accept Di Martino's view that the more we attract attention to the Hong Kong problem within the EEC the less favourable the result is likely to be. The other main target for lobbying would be the United States. I doubt if they would take any final position on beneficiaries until they have decided on their general approach to the preference scheme, e.g. whether they will pursue the idea of "competitive need", go for a duty-free quota scheme, etc. We might however explore with the Board of Trade whether it would be advisable to put our views to the Americans either formally or informally at this stage.
3. I agree with Mr. Combs that it would be useful if we tackled Mr. Goldsmith on this problem. We may or may not need an internal meeting first. Do you have any indication of the Hong Kong Government's own views later than Mr. Jones' memorandum from Geneva No. 74 of 7 May in paragraph 10 of which he said the Hong Kong Government should start thinking about fallback positions? We did of course have a view on all this in paragraph 2(b) of the enclosure to the Governor's savingram CR 4/45401/64 of 4 January.
In Britten
(R. G. BRITTEN) Trade Policy Department
22 September, 1969
Copy to Mr. Combs
CONFIDENTIAL
No comments yet.
Private notes are available after approval.