3.
10.
As regards beneficiaries, it has been decided that all 92 members of the Group of 77 will be included in phase One whether or not they maintain discriminatory restrictions against Japan. So also will Taiwan.
11.
Following the introduction of phase one, considera- tion will be given to the conditions of inclusion of dependent territories, Including Hong Kong; the O.E.C.D. 'developing countries' - Spain, Portugal, Greece and Turkey; and the two Bast Bloc applicants, Rumania and Bulgaria. China, it was noted, "had not applied to be a beneficiary"
12.
pleade
They would not be drawn on a possible list of restrict- ions in our case. These had not yet been decided". I pleaded for an early indication of their thinking so we might be able to offer some helpful comments. By way of illustration I mentioned that they had earlier indicated sensitivity in regard to imports of fireworks from Hong Kong, despite the fact we did not produce any. Their statistics showed imports by country of shipment, not origin, and were therefore misleading. obviously made an impression and the M.I.T.I. representative asked if they might feel free to call on us for statistical help. I assured him we would be happy not only to produce figures but also to come and discuss them.
This
13.
I took the opportunity of this part of the discussion to rub in the fact that Hong Kong was only third (after Korea and Taiwan) supplier of textiles and was nothing like as low- cost a producer as either of the first two. Ohtake of the N.F.A. noted that the E.E.C. had excluded Hong Kong completely as far as textiles were concerned. I noted in response that for the main part the E.E.C. was extending preferences on textiles to only seven beneficiaries not including Taiwan. In addition, they had lowered the non-beneficiaries' contribu- tion and the 'butoirs' in a number of cases. I suggested that in these devices might lie some possibilities for Japan to protect sensitive sectors, textiles and non-textiles, on a non-discriminatory basis.
14.
It was clear from their reaction that this idea had been considered and reluctantly discarded. They "had already had enough criticism of the 50% tariff cut and 501 cut off", especially from Korea, and would not press their luck. In addition, Ohtaka stressed that their tariff quotas were not open ended, mlike the non-sensitive I.E.C. tariff quotas. The 501 cut off would be rigidly enforced.
15.
I suggested that with a 501 cut off, a 1968 base and 501 tariff reductions for sensitive items, there was little case for exclusion by product of Hong Kong or any other supplier. In any case I reminded them of the "no exclusion on the grounds of competitiveness" principle agreed in 0.E.C.D. This drew a very garbled statement from the M.I.T.I. man which, insofar as I could understand it, was that politicians were sensitive to widely held fears of Hong Kong competition, especially where it threatened small industrial units. I commented that this fear was something of an anachronism and repeated that the real low cost threat today came from Taiwan and Korea. added a little homily on the contribution we might make to
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