Kr Perceval (Trade Policy Department)
768
ANGLO-JAPANESE TALKS
GENERALISED PREFERENCES
1. Your minute to me of 2 June.
2. Although I agree that the time has come for plain speaking, it seems to me that our argument at 4(b) and therefore 4(c) of the draft is weak. As pointed out to Mr Burns (TPD) by Mr Laird in his minute of 7 May, it is now beyond reasonable doubt that many people in Japan would be happy to see Hong Kong excluded from the American scheme as a result of first being excluded from the Japanese scheme. Not only therefore are the Japanese likely to be unimpressed by the argument in its present form, they may figuratively rub their hands in glee that we have confirmed their own interpretation. This is borne out by the fact that although paragraph 4 of FCO telegram No 256 to Tokyo was included against Mr Laird's advice, it was not used by the Minister and Wakefield in discussions with the MYFA for precisely the same reasons as advanced by Mr Laird (3rd sentence, paragraph 1 Tokyo telegram No 364).
3. Although the points have been made a number of times already, we should be on safer and possibly more productive ground to hinge our arguments on Japan's own declared interests in further liberalisation of world trade and point out that discrimination against Hong Kong in favour of her Far Eastern competitors is incompatible with this declared intention. (Paragraphs 3(B) and 3(c) of FCO telegram No 256 to Tokyo refer).
4. You might also consider the possibility of underlining the fact understood tacitly from paragraph 4(a) of the draft that any serious harm to the Hong Kong economy would reflect adversely albeit relatively little - on Japan. Conversely you may feel that Japan would think this a small price to pay for excluding Hong Kong from benefits under the US scheme.
-
J A Clewley
2 June 1971
Copy to:
Mr McCarthy, FED
Mr OH Kemmis, CRE1, DTI
Mr Laird (or)
until 10/11 June.
Hong Kong Department
The Anglo-Japanese talks
made up their minds
Kur
In
my
are not
opinion the Japanese have & the talks are unkakerty to do anything
to change them. Tokyo tikgram No 421 is at folio
166) fae %.
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