TNAG-0141-FCO40-177-Hong-Kong-concession--in-Kennedy-Round--on-unmanufactured-to-1969 — Page 25

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Mr. Britten

Hong Kong:

Preference ON Indian Tobacco

At folio 7 is a letter from the Board of Trade enclosing an Indian Aide Memoire protesting against Hong Kong's treatment. of tobacco imports from India. The Indians are their case on Article 8 of the Anglo/Indian Trade Agreement, 1939 under which certain obligations towards India were assumed by the Govern- ments of the self/governing colonies. They contend that the Agreement is relevant to the removal by Hong Kong of the tobacco preference for all Commonwealth countries except Malawi during the Kenedy Round nego- tiations. Our argument against this is that by signing the Geneva (1967) Protocol, India agreed to the Kenedy Round negotiations as a whole and cannot now claim that she was unaware that a particular exception was being made in the case of Malawi.

2. In this connection you will wish to see the cor- respondence between Hong Kong's representative at Geneva (Mr. Jones) and the Indian representative to the GATT. Also relevant is the opinion of our Legal Advisers when this point cropped up in September 1967 and more recently.

3. At folio 18 is the latest letter from the Board of Trade enclosing a draft reply to the Indians. We have rephrased this slightly as per attached draft and I have since cleared it with our Indian and Hong Kong desks, our Legal Adviser and the Board of Trade. I understand that the Indians are now pressing for a reply.

Lt.

You will note that in the latest Board of Trade letter mention is made of the fact that we may wish to take up with the Indians their allegation that "Hong Kong should consider the importance of the preferential treatment India accords to her exports and the con- sequential reciprocal obligations which would naturally fall on the Hong Kong Government. Like the Board of Trade we have no knowledge of any preference which Hong Kong receives from India and if it is desired to make this point you may consider that someone from the Indian High Commission should be summoned to receive our reply to the Aide Memoire. I suggest that we send copies of the Indian Aide Memoire and our reply to Geneva (for the attention of Mr. Jones), to Hong Kong and to our High Commission in Delhi.

Mr McKelvre

(P. Hurden)

25 September, 1969

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