TNAG-0240-FCO40-276-Entitlement-of-Hong-Kong-to-generalised-tariffs-preferences--1970 — Page 43

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CONTIDENTIAL

British Embassy

958

TOKYO

18 December 1970

Generalised Preferences and Hong Kong

Thank you for your letter of 9 December and for FCO telegram number 818 of 11 December. You will now have seen our telegram number 898 of 17 December reporting my conversation with Harada, Director-General of the International Trade Bureau in MITI.

2.

My general conclusion from that meeting is that the Japanese are now seriously considering the possibility of including long Kong in their final offer. The legal problems raised by Harada represent, I think, a blend of smoke screen, behind which the Japanese can gradually make a measured

retreat, and preoccupation with legal complications which seem to fascinate

As I said Japonese officials and often get them hung up for weeks on end. in our telegram under reference, we think it important to provide the Japanese with a suitable legal alibi for including Hong Kong, if it is at all possible for us to do so. I hope therefore that you will be able to let us have whatever is being given to Endo in the Japanese Embassy in London (and any other arguments which may have been thought up in the meantime) by at least the end of the first week in January.

3. Harada referred on several occasions to the Japanese Government's wish to have legislation passed by March (the end of the Japanese financial

He did not year) so that the scheme could be put into effect "next year". spell out what he meant by this, but the press is generally assuming that Harada also said that there had been 1 July 1971 may be the target date.

a protracted argument with the Ministry of Finance about the nature of the legislation to be enacted, which had recentlybeen won by the Ministry of Finance. As a result the necessary adjustments to the Tariff Law would be enshrined in one bill while measures to assist medium and small businesses which may be hit by the resulting increase in exports would be incorporated in another. The Ministry of Finance may be insisting on this split because medium and small businesses in Japan will almost certainly claim assistance not only because of the generalised preference scheme, but also because of the increased pace of Japanese liberalisation of import quotas and possibly a non-cotton textile restraint agreement with the US. Harada asked about our own legislative proposals and the likely programme for our implementation of the scheme. I undertook to put this to you and to let him know if there was anything that we could say on this point at this stage.

R. C. Britten, Esq.; Trade Policy Department, F.C.O.

CONFIDENTIAL

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