TNAG-0250-FCO40-286-Discussions-on-EEC-negotiations-between-officials-of-Hong-Ko-1970 — Page 174

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It is of course also possible that Japan

would in any case wish to exclude Hong

Kong from her preference 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 unreas-

onable 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 a pos-

sible exclusion of Hong Kong textiles,

with

but, 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 on

HMG to compensate Hong Kong within the con-

text of the UK GPS (at least until such time

as we enter the EEC, and have to merge our

scheme with theirs). The Hong Kong officials

are likely to press that HMG give firm under-

takings to eliminate some of her main rivals

as beneficiaries under our scheme, and pos-

sibly also to eliminate certain products in

the scheme of major interest to Hong Kong.

4. Ministers have agreed to the proposal in

EC (70) 13 (paragraph 10, (c)) that we might,

if necessary, warn other major donors that if

they excluded Hong Kong, the Uk would have to

exclude her major competitors, Taiwan and