TNAG-0280-FCO40-316-Visit-of-Parliamentary-under-Secretary-of-Foreign-and-Common-1970 — Page 44

CONFIDENTIAL

BRIEF FOR MR. ROYLE'S VISITS TO TOKYO AND HONG KONG

GENERALISED PREFERENCES: HONG KONG AND JAPAN

An Aide Memoire expressing MIG's concern at the possible exclusion of Hong Kong was handed to the Japanese Government

in August. This has been followed up by conversations between officials in Tokyo and Geneva and by a personal message from the Secretary of State to the Japanese Foreign Minister delivered on 12 September. The Japanese have told us that a decision to exclude Hong Kong has already been taken (they have subsequently said that the matter is still under consideration) ostensibly on the grounds that liong Kong is a territory and therefore the sensibility of the metro- politan power. Our view is that this is merely a device to

exclude certain areas which the Japanese consider to be a threat to their domestic industry.

..2. The following points are relevant if Hong Kong were to

be excluded from the scheme:-

(a) Hong Kong is without natural resources and is therefore

dependent on the export of manufactures. It is conse-

(b)

quently particularly vulnerable to trade restrictions.

If duty free entry were enjoyed by Hong Kong's

competitors, the competitiveness of Hong Kong's products

would be reduced and, in some sectors, nullified.

CONFIDENTIAL

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