TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 115

CONFIDENTIAL

C

Trade and Industry (MITI) informed Japanese industry

However, according to the Ministry of

accordingly.

MITI,

Foreign Affairs an instruction to seek a means of

including Hong Kong was given by Mr Sato as a result of

his meeting with the Prime Minister in New York last

October. The Foreign Ministry supports this line, and

the Ministry of Finance is thought to be neutral.

under pressure from Japanese industry, remains obstructive.

MITI's tactic, if they cannot obtain Hong Kong's total

exclusion from the Japanese scheme, is to remove or limit

preferences for Hong Kong to a point where inclusion

becomes meaningless.

We have long urged the Japanese to

agree to a visit by Hong Kong officials armed with the

statistics that might serve to demolish most of MITI's

arguments, the balance of trade being massively in Japan's

favour, but the Japanese have put off such a visit with a

series of pretexts. The Japanese Foreign Ministry, who

have taken a consistently helpful line have advised that

only a Prime Minister to Prime Minister approach can now

help,

RECOMMENDATION

3.

I recommend that the Prime Minister should be invited

to send a message to Mr Sato, on the lines of the attached

draft. A covering letter to No 10 from the Private

Secretary is also submitted.

20 May 1971

Aulalfen

R G Britten

Trade Policy Department

cc: Mr Bottomley, Mr Laird (HKD), Mr Morgan (FED), Mr Kemmis(DTJ)

CONFIDENTIAL