AIDE MEMOIRE
Y
Under Article 8 of the U.K- India Trade Agreement of 1939 the Governments of the non-self Governing Colonies, the Protectorates and Protected States are committed to accord to India the same preferential tariff as they offer to any other Commonwealth country. Hong Kong as one of them covered by the provisions of paragraph 1 of Article 8 of the Agreement, is to accord to India any preference which she may accord to any other Commonwealth country.
2. It has come to the notice of the Government of India that Hong Kong has removed the preferential margin hitherto available for unmanufactured tobacco originating in Commonwealth countries, except tobacco from Malawi. This decision of the Hong Kong Government, to continue preferential treatment to one Commonwealth country while denying the same to India brings about discrimination between two Commonwealth developing countries and is contrary to the UK-India Trade Agreement, 1939.
3.
Hong Kong is one of India's traditional markets for tobacco. India views with great concern the prospects of any adverse effects on its tobacco exports to that market. The Preference, which India enjoys in that market is of particular importance to her for selling Indian tobacco in that market.
4. The effect of the new order of the Hong Kong Government has been that Malawi tobacco, which previously received preference vis-a-vis foreign tobacco, now gets preference not only over foreign tobacco but also over tobacco from other Commonwealth countries. The country-wise removal of Preference has resulted in intensification and extension of the area of preference for one particular country. The principles of GATT are opposed to any such extension of discrimination.
5. In March, 1967 the United Kingdom Delegation in Geneva had informed the Indian Delegation that, following United States Government's request to Hong Kong to eliminate Commonwealth Preference on unmanufactured tobacco imported into Hong Kong, the Hong Kong Government had decided to eliminate the Commonwealth Preference on tobacco and the Indian Delegation had represented orally to the United Kingdom Delegation against .elimination of Commonwealth Preference on tobacco, but
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