TNAG-0334-FCO40-370-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 214

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CONFIDENTIAL

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 will enable standards of living taxk

to be raised by an expansion of international economic

relationships and an even greater liberalisation of

world trade.

4. The fact that the crisis triggered off by the

economic measures introduced by President Nixon in

August 1971 has been resolved will no doubt have been

greeted with particular relief in Hong Kong, in view of

her dependence on overseas trade. What we now have to

work for is a définitive resolution of the basic problems

of the world monetary and trading system. This will

require careful preparation and will take time to set

up, let alone carry through.

5. We think a plausible scenario would be as

follows: 1972. Completion of bilateral trade

negotiations between the US and the EEC/Japan/Canada.

Passage of the Gold Bill through Congress. Preparatory

work for GATT negotiations (under Article XXIV) on the

effects of EEC enlargement. 1973. Ratification of

the Accession Treaty. GATT Article XXIV negotiations.

Simultaneously, Congress equips the President with

trade negotiating powers. Late 1973 or 1974. Opening

of global trade negotiations.

CONFIDENTIAL

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