TNAG-0250-FCO40-286-Discussions-on-EEC-negotiations-between-officials-of-Hong-Ko-1970 — Page 120

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ing suit.

CONFIDENTIAL

Whatever partial deal is suggested to the

EEC should also be available to the USA.

(c) Japan. The most negative reactions to our representa-

tions have come from Japan, which takes only 3.4% of

Hong Kong's exports (0.5% of total Japanese imports)

and in 1969, enjoyed a trade surplus with the colony of

US.8546,million. Japanese excuses have varied widely,

and hardly bother to conceal the basic fact that

(i) Japanese textile firms would not tolerate

any concession to Hong Kong exports.

Japan would feel obliged to increase her

(ii)

list of sensitive items were Hong Kong

included as beneficiary.

It is of course also possible that Japan would in any

case wish to exclude Hong Kong from her preferences

scheme simply to ensure that the Americans did the

same. This would effectively damage a trading rival in

the US market. In view of this, our approaches to the

Americans should emphasise that it would be unreason-

able of them to insist on a Japanese contribution as a

pre-requisite for the grant of American preferences to

Hong Kong. The only faint possibility of shifting the

Japanese lies with the exclusion from preferences of

Hong Kong textiles, though we would require the colony's

inclusion for other items (to whatever extent may prove

mutually acceptable).

(Defensive) Contingency plan

3.

If the worst happens, and Hong Kong does not secure inclusion

in any donor preference scheme, there will obviously be pressure

3

CONFIDENTIAL

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