TNAG-0334-FCO40-370-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 20

CONFIDENTIAL

SECRETARY OF STATE'S VISIT TO HONG KONG

FEBRUARY 1972

DEVELOPMENTS IN WORLD TRADING SYSTEMS

AND THEIR EFFECT ON HONG KONG

Brief No 6

International Trade Prospects

1. With the international monetary settlement, and the abolition of

the US import surcharge and the "Buy American" provision in the US

job development tax credit scheme, the threat of a descent into

protectionist warfare between the developed countries has been staved

Through her "voluntary" restraint agreement on non-cotton

textiles with the US, Hong Kong has played a significant part in the

defusing of the situation.

off.

2. The bilateral trade negotiations on outstanding short term issues

between the US on the one hand and the EEC, Japan and Canada on the

other have been predictably tough. But there are grounds for optimism

that enough progress will prove to have been made to enable the US

Administration to present to Congress the Bill to give formal effect

to the devaluation of the dollar.

3. Under the procedure for consultation during the interim period,

we gave our assent to the Community's negotiating mandate, and have

been consulted at each stage of these negotiations. We also supported

and welcomed the Community's Declaration of Intent, prior to the

opening of the negotiations, in which they proclaimed their willingness

to take part in global trade negotiations and their conviction of the

need for an overall examination of the structure of the world economy

and of the conditions for a new equilibrium at international level

/which

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CONFIDENTIAL