TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 200

CONFIDENTIAL

6. WE THEREFORE CONSIDER THAT IT WOULD BE HELPFUL, PROVIDED THAT YOU AND HONG KONG AGREE, IF WE COULD BE INSTRUCTED TO TAKE UP THIS PROBLEM AGAIN AT A HIGH LEVEL IF POSSIBLE BEFORE FURTHER CONSIDERATION OF THIS MATTER IN MITI, WHICH MAY TAKE PLACE FROM 10 MAY AFTER MIYAZAWA'S RETURN FROM AUSTRALIA AND NEW ZEALAND. WE COULD SAY THAT WE HAD NOTED THE PASSAGE OF THE GENERALISED PREFERENCES BILL THROUGH THE DIET ON 29 MARCH

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AND HAD BEEN ENCOURAGED BY THE PRIME MINISTER'S STATEMENT ABOUT THE JAPANESE GOVERNMENT'S AIM TO INCLUDE HONG KONG IN THE JAPANESE OFFER. WE REALISED THAT IN THE MONTHS IMMEDIATELY PRIOR TO IMPLEMEN- TATION OF THE OFFER, THERE WOULD BE MANY DIFFICULT QUESTIONS TO BE SOLVED OVER TECHNICAL MATTERS AND PARTICULARLY OVER EXCLUSION LISTS. BECAUSE ON THE NATURE OF ITS EXPORTS HONG KONG MIGHT PRESENT PARTICULAR DIFFICULTIES IN THIS RESPECT. THERE WERE HOWEVER A NUMBER OF ITEMS IN WHICH IT WAS HARD TO SEE THAT HONG KONG REPRESENTED ANY SERIOUS THREAT TO JAPANESE INDUSTRY. IN VIEW OF THE CONTINUING MARKED IMBALANCE OF TRADE BETWEEN JAPAN AND HONG KONG WE HOPED THAT IT WOULD BE POSSIBLE FOR THE JAPANESE TO ARRIVE AT A LIST NOT NOTICEABLY LESS LIBERAL THAN THAT PROPOSED FOR HONG KONG BY THE EEC. IF ALL TEXTILES WERE TO BE EXCLUDED, THEN WE HOPED THAT THIS COULD BE BALANCE BY A SHORT LIST OF EXCLUDED SUNDRY GOODS WE CONSIDER REPRESENT- ATIVES FROM HONG KONG SHOULD HAVE THE OPPORTUNITY TO PRESENT TO THE JAPANESE AUTHORITIES MATERIAL WHICH WOULD HELP THEM REACH AN ACCURATE ASSESSMENT OF ITEMS IN WHICH HONG KONG WAS HIGHLY COMPETITIVE. IF SUCH A VISIT PRESENTED SERIOUS DIFFICULTIES FOR THE JAPANESE, THEN WE HOPED THAT THEY WOULD TAKE ESPECIAL CARE IN THEIR DELIBERATIONS ON THE EXCLUSION LIST FOR HONG KONG.

FCO PASS TO ROUTINE HONG KONG AND WASHINGTON. PILCHER

[REPEATED AS REQUESTEDT

INTERNATIONAL TRADE DISTRIBUTION:

COMMODITIES DEPT

HKD

FED

N. AM DEPT

TPD

&&&&

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