TNAG-0239-FCO40-275-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 195

HKIL G/N HK

CYPHER CAT A

ROUTINE UKDEL OECD PARIS

TELEGRAM NUMBER 65

RESTRICTED [ NEUTRAL]

Mc Kinnear

2.11

Sus Mi Royle's visit to Jeep

be used for putting political

RESTRICTED

argmento! Mis

TO FOREIGN AND COMMONWEALTH OFFICE

9 SEPTEMBER 1979

ADDRESSED TO F C O TELEGRAM NUMBER 65 OF 9 SEPTEMBER 1979 RFI TO

HONG KONG TOKYO WASHINGTON UKDEL EEC UKMIS GENEVA,

SEE M.1.P.T. ~

GENERALISED PREFERENCES FOR HONG KONG

KARUDA TOLD JONES THAT IN THE JAPANESE VIEW OUR AIDE MEMOIRE ON

HONG KONG HAD PLACED TOO MUCH EMPHASIS ON ECONOMIC CONSIDERATIONS

AND TOO LITTLE ON POLITICAL FACTORS. HE ADMITTED THAT FORMAL

JAPANESE REASON FOR EXCLUSION OF HONG KONG, THAT SHE WAS A TERRITORY

AND THE RESPONSIBILITY OF THE METROPOLITAN POWER, WAS ONLY AN

EXCUSE, THE REAL REASON WAS THAT THE JAPANESE CONSIDERED HONG KONG

WAS SUFFICIENTLY GROWN UP*** NOT TO NEED PREFERENCES. THIS WAS

CONFIRMED IN THEIR VIEW BY THE STATEMENT IN THE AIDE MEMOIRE THAT

HONG KONG DID NOT NEED PREFERENCES AS SUCH BUT ONLY NOT TO FACE

DISCRIMINATION IN FAVOUR OF HER COMPETITORS. THE ONLY ECONOMIC POINT

THAT WEIGHED WITH THEM WAS THEIR LARGE TRADE SURPLUS WITH HONG KONG

BUT THIS WAS NOT SUFFICIENT WHEN WEIGHED AGAINST THE OTHER FACTORS,

2. IN REPLY JONES SAID THAT EXCLUSION OF HONG KONG BY MAJOR

DONORS WOULD INEVITABLY BRING ABOUT THE DISCRIMINATION WHICH WE

FEARED. THIS WAS A REAL POINT AND THERE WAS A SERIOUS PROSPECT FOR

HONG KONG OF LOSS OF TRADE TO NEIGHBOURING COUNTRIES. SURELY IT

WAS NOT THE INTENTION OF THE PREFERENCES SCHEME THAT THE GRANT OF

REF

PREFERENCES SHOULD BE MORE AT THE EXPENSE OF HONG KONG, THAN OF THE

IMPORTING COUNTRIES OSTENSIBLY EXTENDING THEM. HONG KONG WAS READY

TO ACVBPJ KERNANMPETITIVE CLAUSE IN THE JAPANESE SCHEME (OR ANY OTHER OBJECTIVE PROCEDURE FOR EXCLUSION BY COUNTRY BY PRODUCT)

PROVIDING IT WAS APPLIED TO HER COMPETITORS AS WELL. IN THIS

CONNECTION, IF THE JAPANESE CONTINUED TO EXCLUDE HONG KONG AND

REMOVED THE COMPETITIVE CLAUSE FROM THEIR SCHEME HONG KONG WOULD

BE DOUBLY HIT.

13.

RESTRICTED

Page 195Page 196