TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 76

01

TRINS COFNEW

VISIT OF LR AICHI JAPANESE FOREIGN MINISTER 10 JUNE 1971

GENERALISED PREFERENCES AND BRITISH DEPENDENT TERRITORIES

1

Although this is essentially a courtesy call I recommend that the opportunity be taken of raising the question of the inclusion of Hong Kong and other dependent territories in Japan's scheme of generalised preferences. The Japanese Cabinet is reported to be about to decide that these territorie: should be excluded, at least for the time being, despite a message from the Prime Minister to ir Sato. This appears to be the last chance of influencing their decision.

2

Following earlier representations, we had believed that we had overcome the Japanese reluctance to include Hong Kong and our other dependencies. Mr Sato stated in the Diet on 23 March that Hong Kong was "not unsuitable" for inclusion. But the Ministry of International Trade and Industry have now obtained agreement from the other Ministries that our dependencies should be excluded from the scheme at the start and that their case should be reviewed in the course of the

following year. This recommendation will go to the Japanese Cabinet on 20 June. It is intended that the Japanese schemo should come into effect on about 1 August.

The EEC have already announced that all our dependent territories including Hong Kong will be included in their scheme (although not for textiles and footwear). The United States have claimed similar treatment for their dependencies but their decision on Hong Kong is now dependent on a favourable decision by Japan (they are in any case excluding textiles and footwear). Only Japan has any objection in principle to the inclusion of dependencies.

BRIEF

4 It is suggested that the Secretary of State should refor to the message from the Prime Minister (a copy is attached) and express his serious concern at the news from our Embassy in Tokyo that officials are recommending the exclusion of Hong Kong and our other dependencies. The reasons for our concern that an adverse decision should not be taken have been explained to the Japanese Government on several occasions but they have not hitherto been answered.

5 Briefly our principal arguments are that:

(i) our dependent territories (other than Hong Kong) are

undeniably among the least developed of the developing countries;

(ii)

Hong Kong is a very important export market for Japanese goods and its future prosperity is of great importance to the Far East;