TNAG-0299-FCO40-335-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 86

40.

CURITY CLASSIFICATION

DRAP

To:-

Type 1 +

From

(169

Top Secret.

Secret.

Confidential.

Restricted.

Unclassi

KIVACY MARKING

................................J. Confidence

亨

Anglo-Japanese Ministerial

Consultations

Brief No.8 Anglo-Japanese

Economic Relations

Telephone No. & Ext.

Department

Generalised Preferences (GPS) and Hong Kong

3.

Despite the Trime Minister's recent message to Mr Sato (text at Appendix 1 of Annex B), it appears that Hong Kong's chances of worthwhile inclusion in the Japanese GPS, likely to start on 1 August this year, are fading. The official submission due to come. before the Cabinet in Tokyo on 20 June, settling the ; Japanese preferences scheme, relegates Hong Kong along with the semi-developed "problem" candidates (Spain, Israel, Romania etc, etc) to a hypothetical second and later stage of inclusion. The talks with Mr Aichi are therefore the last opportunity to apply pressure to the Je

Japanese to extend a worthwhile GPS offer to Hong Kong ab initio, as the EEC have already done. HM Ambassador in Tokyo urges us to make this attempt.

4.

It would therefore be helpful if the Secretary of States were to speak to Mr Aichi, expressing forcibly HMG's surprise and concern that Japan, whose GPS is in any case less generous in scope than that of the other major donors in the UNCTAD preference system, should, notwithstanding the PM's message, apparently still find it too difficult to include from the outset, Com- monwealth dependent territories. Of these, only Hong Kong has any significant industrial exports, but a cer- tain generosity towards Hong Kong might be expected from a country like Japan which exports four times more to Hong Kong than it imports from the colony.

5.

Discrimination against Hong Kong in the GPS would have severe economic and hence political repercussions in Hong Kong, and it would be short-sighted of the Japanese Government to risk further instability in the delicate South-East Asian theatre. We must therefore ask the Japanese Government to consider most seriously