TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 198

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Spoke to M. Perceval.

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TO PRIORITY F C O TELNO 323 OF 1 MAY INFO HONG KONG, WASHINGTON. MANILA TELEGRAM NO 5 TO HONG KONG AND WHITEHEAD'S LETTER TO BURNS OF 23 APRIL: GENERALISED PREFERENCES.

.

OHTAKA CALLED IN WHITEHEAD EARLIER THIS WEEK TO MAKE ONE OR

TWO SUGGESTIONS QUOTE ON A PERSONAL BASIS UNQUOTE ABOUT HOW

ONE MIGHT PROCEED ON HONG KONG FOR BACKGROUND, HE EXPLAINED THAT INDUSTRY'S REACTION TO MITI SUGGESTIONS THAT HONG KONG

SHOULD BE INCLUDED IN THE JAPANESE OFFER HAD BEEN STRONGER THAN

EXPECTED AND DEBATE IN THE DIET HAD ALSO BEEN MORE DIFFICULT

THAN THE GOVERNMENT HAD FORESEEN. THERE WAS ALSO DIFFICULTY

OVER THE TIMING OF IMPLEMENTATION: THE CHOICES WERE TO IMPLEMENT FOR ALL BENEFICIARIES TOGETHER (TERRITORIES AS WELL AS COUNTRIES)

OR TO MAKE IT A 2-STAGE OPERATION WITH TERRITORIES FALLING

INTO THE SECOND STAGE. IMPLEMENTATION IN SOME FORM WOULD HAVE

TO TAKE PLACE BY 1 OCTOBER, BUT A 2-STAGE OPERATION MIGHT

MEAN THAT IMPLEMENTATION FOR COUNTRY BENEFICIARIES WOULD BE

POSSIBLE BY 1 AUGUST WITH TERRITORIES FOLLOWING IN EARLY 1972,

EITHER 1 JANUARY OR 1 APRIL. THERE WAS THE DANGER HOWEVER THAT

THE EXERCISE MIGHT RUN OUT OF STEAM AFTER IMPLEMENTATION FOR COUNTRY BENEFICIARIES AND PREFERENCES MIGHT NOT THEN BE EXTENDED

TO TERRITORIES AT ALL.

2. IN THESE CIRCUMSTANCES, OHTAKA THOUGHT THAT TACTICALLY THE

MYFA SHOULD PRESS OTHER MINISTRIES TO AGREE TO A ONE-STAGE

IMPLEMENTATION. TO DO THIS, THE HONG KONG PROBLEM NEEDED TO

BE SETTLED AS QUICKLY AS POSSIBLE. OHTAKA THOUGHT THAT IN ORDER

TO GUARD AGAINST RENEWED PRESSURES TO EXCLUDE HONG KONG ALTOGETHER,

IT WOULD BE HELPFUL IF WE COULD INFORM THE MYFA THAT WE WOULD

BE CONTENT FOR HONG KONG TO BE INCLUDED, EVEN IF THE EXCEPTIONS

LIST WAS SO LONG THAT HONG KONG RECEIVED VIRTUALLY NO BENEFIT

WHATSOEVER.

}

3. WHITEHEAD REPLIED THAT HE WAS SURPRISED TO HEAR THAT THERE

WAS SOME DOUBT ABOUT THE INCLUSION OF HONG KONG IN THE JAPANESE

OFFER. THIS WOULD REPRESENT A RETREAT FROM THE POSITION REACHED

IN JANUARY WHEN HIRAHARA HAD TOLD BOTTOMLEY THAT THERE WAS

A CONSENSUS AMONG THE MINISTRIES THAT HONG KONG SHOULD BE INCLUDED THE DEBATE IN THE DIET HAD SCARCELY TOUCHED ON HONG KONG.

HE FOUND IT HARD TO BELIEVE THAT THE JAPANESE WERE

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