TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 120

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BRITISH EMBASSY

WASHINGTON, D.C.

19 May, 1971

U.S. Generalised Preferences

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Thank you for your letter of 13 May which we discussed

in general terms on the following day.

2.

I have spoken again to Ed Cronk who tells me that the interagency paper on the U.S. generalised preferences scheme. went to the Peterson office in the White House on 17 May. Cronk expects that the internal processing there will take another ten days to two weeks. The draft bill is now in fairly good shape and will only need minor titivations depending on the White House decision on the "disagreed" issues (see my letter of 1 May). In final form the bill will then go to the Office of Management and Budget for what should by then be a routine clearance before publication, hopefully within the first half of June..

3.

In these circumstances Alec Hermann and I are urgently seeking a meeting with Ernest Stern who is outstandingly the obvious person in the Peterson office to discuss the matter with in the first instance. When we have done this we shall telegraph if it seems likely that an aide memoire or some form of higher representations would be desirable.

4.

On the substance of the two "disagreed" issues which are of prime concern to us (the "reverse preferences" condition and the treatment of Hong Kong) Cronk is optimistic that the State Department's representations will be approved. Cronk was a little cagey about the exact way in which these are being presented to the White House and I hope to learn more of the detail from Ernest Stem. Subject to this however I think the State Department's hope can be summarised as follows.

5.

On the reverse preferences condition I am morally sure that the dilemma of the Caribbean countries is recognised and that this is an important element in the State Department's reasoning in support of some flexibility. What Nat Samuels said in London recently did perhaps just a trifle overstate the degree of flexibility that is in mind. I pressed Ed Cronk on the point and he acknowledged that the insistence of a prior declaration by beneficiaries that they would phase out reverse preferences by 1975 might be dropped; but he reasserted that it would remain the determined intention of the Administration that by 1975 reverse prefemces would be abolished by all beneficiary countries.

This he felt removed the basic problem

R. G. Britten, Esq.,

Trade Policy Department,

F.C.O.

-1-

CONFIDENTIAL

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