TNAG-0141-FCO40-177-Hong-Kong-concession--in-Kennedy-Round--on-unmanufactured-to-1969 — Page 77

Reference CR :.15504G.

Note of a Meeting held on 18th June 1969 at the Board of Trade, 1 Victoria Street. S..1.

Present:

Mr. J. Gowers,

CRE.2,

boerd of Trade

Miss M. V. Muskett,

CRE.2,

Board of Trade

Vr. M. J. Woodhead,

CRE.1,

Board of Trade

©

Mr. J. G. Morris,

Mr. I. Murray,

Miss G. M. Clutterbuck,

Hr. R. S. Husain, Mr. S. P. Bahl,

CRE.1, Board of Trade

Hong Kong Department, Foreign & Commonwealth Officer CRE.2, Board of Trade

First Secretary Commercial), High Commission for Inda Attache (Commercial) High Commission for India

1. Kr. Gowers received Mr. Husain and Mr. Bahl and introduced the other British Government officials. He explained that he had invited other officials to be present since he was not himself responsible for Hong Kong's relations with other governments.

2. Mr. Husain said that he had called to present on behalf of his Government the attached Aide Memoire in which representations were made to the British Government, who are responsible for Hong Kong's external rel tions, that the removal by Hong Kong of the preferential rate of duty on imports of unmanufactured tobacco from India during the Kennedy hound negotiations, while retaining the preference on imports from Malawi, contravened Article 8 of the U.K.-India Trade Agreement.

3. In reply to a question by Mr. Govers, ár. Husain confirmed that he was aware of the correspondence on this subject which had passed between Kr. Pradhan of the Indian Delegation to the G.A.T.T. ani Mr. Jones of the U.K. Delegation in Geneva with special responsibility for Hong Kong affairs. The question of the U.K.-India Trade Agreement had not, however, been raised on that occasion.

4.

Mics Kuskett said that it was her understanding that any changes as a result of the Kennedy Round or other multil teral negotiations superseded the provisions of the U.K.-India Trade Agreement, but this would of course, need to be examined by legal experts before a definite answer could be given.

5. Kr. Woodhead asked for clarification of the penultimate sentence of paragraph 4. in the Aide Memoire which stated that liong Kong's action had resulted in "intensification and extension of the area of preference". Mr. Husain explained that, in his Covernment's view, the remo el of the preference on Indian and other Commonwealth imports except those from Halawi gave Malawi preference not only over foreign sup liërs but also over other Commonwealth suppliers and therefore increased or extended her preferential position. Referring to the last sentence of paragraph 4 of the kidə Memoire Mr. doo head pointed out that G.A.T.T. is opposed to new preferences but that in this case it could be argued that Malawi had done no more than retain an existing preference and was therefore not in contravention of GATT. Mr. Husain considered that the preference had been withdrawn from all Commonwealth suppliers and that lawi had subsequently been reinstated, this therefore constituting a "new" preference.

6. r. orris said that the retention of Commonwealth Preference for Malawi tobacco wes clearly indicated in the Sch-dule circulated to delegations at the conclusion of the Kennedy Round negotiations, and the Indian delegation had not rai sed objections at that time. Mr. Husein replied that oral objections had been raised but nons had been ut in writing. In further discussion it was not, however, clear wh ther these objections referred only to Hong lon's original proposal to recove all Commonwealth Preference or to the fairly late decision to retain the preference for Malawi.

7. Mr. Gowers