IMMEDIATE
CYPHER/CAT A
CONFIDENTIAL
REC@VED IN
REGISTRY No.51
(MT)
141
FM F C O 071633Z
11 MA, 1971
HK 6/1
CONFIDENTIAL..
NEUTRAL
TO IMMEDIATE TOKYO TELNO 256 OF 7 MAY INFO IMMEDIATE HONG KONG
AND ROUTINE WASHINGTON.
YOUR TELNO 323: GENERALISED PREFERENCES HONG KONG
1. WE AGREE THAT OHTAKA'S SUGGESTIONS APPEAR TO REFLECT A
DISAPPOINTING AND DISTURBING MOVE AWAY FROM THE BASICALLY FAVOUR- ABLE JAPANESE POSITION ON HONG KONG WHICH EARLIER CONTACTS HAD INDICATED, AND WE ARE GLAD THAT WHITEHEAD REACTED ROBUSTLY.
2. WE ALSO AGREE, SUBJECT TO THE VIEWS OF GOVERNOR HONG KONG, THAT YOU SHOULD, MAKE AN EARLY HIGH LEVEL APPROACH TO MYFA AS PROPOSED IN YOUR PARA 5.
3. IN ADDITION TO THE ARGUMENTS YOU SUGGEST DEPLOYING, YOU
SHOULD MAKE THE FOLLOWING POINTS:
(A) WE WOULD BE MOST SERIOUSLY CONCERNED IF THE JAPANESE GOVERNMENT WERE NOW TO DECIDE TO EXCLUDE HONG KONG FROM THEIR PREFERENCES
SCHEME OR TO INCLUDE HER ONLY 'PROFORMA''. WE HAVE NOT RECEIVED ANY FORMAL OR SUBSTANTIVE REPLY TO OUR AIDE-MEMOIRES OF 13 AUGUST 1970 AND 18 FEBRUARY 1971, OR THE MESSAGE WHICH YOU DELIVERED TO AICHI LAST YEAR (YOUR TELEGRAM NO 691 OF 14 SEPTEMBER 1978). SUCH INFORMAL REACTIONS AS WE HAVE HAD ALMOST UNIFORMLY SUGGESTED THAT OUR ARGUMENTS HAD BEEN ACCEPTED, OR AT ANY RATE
WERE NOT DISPUTED.
(B) AS WE HAVE EXPLAINED A NUMBER OF TIMES, DISCRIMINATION IN THE JAPANESE MARKET IN FAVOUR OF HONG KONG'S FAR EAST COMPETITORS AT THE EXPENSE OF HONG KONG WOULD THREATEN GRAVE INJURY TO THE COLONY'S PRESENT AND FUTURE TRADE AND WOULD INTRODUCE A DISCRIMINATORY ELEMENT INTO INTERNATIONAL TRADE THAT WOULD BE INCOMPATIBLE WITH ITS HEALTHY DEVELOPMENT. IT WOULD ALSO BE DIFFICULT TO RECONCILE SUCH A MOVE WITH JAPAN'S STANDING AS ONE OF THE LARGEST AND MOST POWERFUL TRADING NATIONS IN THE WORLD AND WITH JAPAN'S OWN DECLARED INTEREST IN THE FURTHER LIBERALISATION OF WORLD TRADE, IN PARTICULAR THE TRADE OF DEVELOPING COUNTRIES.
/(C) THE
CONFIDENTIAL
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