TNAG-0239-FCO40-275-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 177

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Draft Speaking Notes

Generalised Preferences : Hong Kong and Japan

We understand that the Japanese Government are still

considering whether or not to include Hong Kong in their

Generalised Preferences Scheme offer. The British Govern-

ment attach very considerable importance to this matter,

and the Foreign and Commonwealth Secretary has recently

sent a message to Mr. Aichi urging Japan to include long

Kong.

2. The inclusion of Hong Kong in the US offer will almost

certainly depend on Japan's decision to include the territory.

It is very much in Japan's interest to see Hong Kong

included in the US scheme as Iong Kong's trade deficit with

Japan is greater than her surplus with the United States.

This means that the United States is virtually financing

Hong Kong's deficit with Japan. This pattern of exports

is clearly at risk if Hong Kong is now to meet discrimination

in the US market. Such discrimination against the exports

of an economy as resourceless as Hong Kong's may well lead

to a deterioration or living standards with a strong

possibility of political unrest, a development which must

prove highly undesirable in the Asian theatre.

3.

Defensive. If the Japanese Ambassador suggests

that Hong Kong should be excluded because she is a dependent

territory.

/(a)