TNAG-0239-FCO40-275-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 76

CONFIDENTIAL

PART II

British Tariff Requests from Japan: Details

A. Whisky

This important export item earns us some £3m a year. When

imported into Japan in bottles it was formerly subject to

quota restrictions but a date for liberalisation has now

been set (1971).

a tariff of 550 yen por litre equivalent to 100 per cent

ad valorem on standard brands whereas bourbon and rye bear

the equivalent of 35 per cent and 40 per cent respectively.

In addition, all whisky is subject to an internal liquor

tax so arranged that imported standard scotch is taxable

at 220 per cent ad valorem (as a result of its high landed

cost) while most domestic whiskies are in the 150 per cent

or lower tax brackets. The reduction of the tariff wo.seek

aims to achieve a tariff parity with bourbon and rye and

thereby bring the landed cost of scotch into the lower

bracket for internal tax purposes.

However bottled scotch also has to bear

The U.K. whisky industry

need this reduction in time for them to be in a position to

take full advantage of liberalisation when it comes, otherwise

they fear inroads into their market will result from

unrestricted competition from the cheaper spirits.

B. Tool Cloth

British wool cloth earns some 27m a year in the Japanese

market and the figure is expected to increase now that

Japan has liberalised this item.

There is a two way trade

and Japanese exports to the U.K. are subject to voluntary

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CONFIDENTIAL