TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 175

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(C) THE RESTRICTIVE NATURE OF JAPAN'S SCHEME WHICH INVOLVES SMALL QUOTA CEILINGS ON ALL GOODS, TARIFF REDUCTIONS INSTEAD OF DUTY FREE ENTRY ON A SUBSTANTIAL LIST OF SENSITIVE GOODS AND CERTAIN COMPLETE EXCEPTIONS DOES NOT COMPARE WELL WITH THE OFFERS OF THE OTHER MAJOR DONOR COUNTRIES. IN HMG'S VIEW IT IS THEREFORE ALL THE MORE DESIRABLE THAT THE LIST OF BENEFICIARIES OF JAPAN'S SCHEME SHOULD BE AS WIDE AS POSSIBLE AND AS GENEROUS AS THE SIZE OF THE JAPANESE MARKET WOULD JUSTIFY: AND INDEED THE IMPORTANCE OF HONG KONG AS AN EXPORT MARKET FOR JAPANESE GOODS.

4. A FURTHER POINT WHICH YOU MIGHT THROW IN IF YOU JUDGE THE IMPACT LIKELY TO BE FAVOURABLE (WE QUITE SEE THAT IT COULD BE THE REVERSE) IS THAT AN AVERSE DECISION ON JAPAN'S PART MIGHT ALSO HAVE THE EFFECT OF INDUCING THE UNITED STATES TO EXCLUDE HONG KONG ALTOGETHER FROM THEIR SCHEME. HONG KONG WOULD THEN HAVE TO FACE DISCRIMINATION IN FAVOUR OF HER MANY COMPETITORS AMONGST THE DEVELOPING COUNTRIES IN HER MOST IMPORTANT MARKET. WHILE THOSE JAPANESE INDUSTRIES THAT EXPORT GOODS OTHER THAN TEXTILES AND FOOT- WEAR TO THE UNITED STATES WOULD NO DOUBT WELCOME THE EXCLUSION OF HONG KONG FROM THE US SCHEME, THE PROTECTION OF THE EXPORTS OF DEVELOPED COUNTRIES IS WHOLLY CONTRARY TO THE OBJECTIVES OF THE GENERALISED PREFERENCES SCHEME.

5. WE ASSUME THAT GOVERNOR HONG KONG WILL COMMENT IN PARTICULAR ON THE VALUE (IF ANY) TO HONG KONG OF PURELY ''PROFORMA'' INCLUSION BY JAPAN. HE WILL ALSO NO DOUBT SAY HOW STRONGLY THEY FEEL

THE LONG-STANDING PROPOSAL FOR A VISIT BY THEIR REPRESENTATIVES TO TOKYO SHOULD BE PRESSED.

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