TNAG-0298-FCO40-334-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 160

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approval has been given the Bill will be submitted to the Diet in mid-February. Since it is one of the Bills which has a direct bearing on the budget, the Bill will have to be passed by the Diet by the end of March. A Cabinet Order designating beneficiaries and products will appear probably in June so that the Japanese offer on

· generalised preferences can come into force on 1 July. The period between the end of March and the early part of June) will be taken up with detailed discussions about the system of certificates of origin and other technical matters. At the time of the Cabinet meeting questions on the inclusion of Hong Kong, China, dependent territories and countries still invoking Article XXXV of the GATT against Japan will be treated evasively. Evasive replies will also be given to the press in response to questions in the Diet when the Bill is being considered. In general the statements will be along the lines of Mr. Miyazawa's statement of 12 January about the possible inclusion by Japan of Hong Kong and China in the generalised preferences offer. This will be deliberate tactics and the exact wording of the statements need not be analysed too closely. 6. From the above I suggest the following points emerge:

(a) Hong Kong will definitely be included in the Japanese offer but the exclusion list of Hong Kong's export items may be long. There should be a chance to discuss this list with the Japanese later. There is no immediate urgency for such discussions since the first MITI list of excluded items has not yet emerged.

If we

(b) There is a willingness on the part of the Ministry of Foreign Affairs to include a number of our dependent territories. London's idea of producing an Aide Memoire on these territories will be useful and will need to include as much documentary evidence as possible. push this point hard we should be able to achieve through the Ministry of Foreign Affairs much of what we are after. (c) There is some Japanese concern about the possibility that Hong Kong might be included in the United States offer.

(a) There seems a good chance that China will be included in the Japanese offer.

7. I think it would be helpful if the problem of generalised preferences were raised by Mr. Bottomley with, Mr. Hirahara on the afternoon of 27 January. After this we should telegraph London with a copy to Hong Kong and other general recipients.

26 January 1971

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CONFIDENTIAL

JS Whitehead