TNAG-1493-FCO40-2051-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 151

IN FACT THERE HAS BEEN SOME CRITICISM IN PRIVATE THAT THE MEXICAN GOVERNMENT HAVE GIVEN AWAY NEGOTIATING TRICKS WITH THE GATT BY

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THEIR QUICK PROGRESS IN REDUCING TARIFFS (BUT THEY NEED TO DO THAT, OF COUSE, TO SECURE BRD/IMF SUPPORT IN DEALINGS WITH THEIR EXTERNAL FINANCING PROBLEM).

4. IT WOULD BE A MAJOR SETBACK TO THE GOVERNMENT'S ECONOMIC STRATEGY IF THE IR GATG APPLICATION FOUNDERED. IT WOULD ALSO BE A BLOW TO MEXICAN EFFORTS TO BUILD UP THEIR TRADING RELATIONSHIP WITH THE EUROPEAN COMMUNITY IF THE COMMISS FON, UNDER PRESSURE FROM US, WERE TO STICK OUT FOR TERMS WHICH THE MEXICANS CONSIDERED UNREASONABLE IN THEIR CURRENT ECONOMIC CIRCUMSTANCES.

5. AS SEEN FROM HERE THEREFORE, THERE STILL SEEMS TO BE MORE FOR US TO GAIN THAN LOSE BY MEXICO'S EARLY ENTRY INTO THE GATT (MY OTTER TELNO 102). IF SO, I SUGGEST THAT OUR NEGOTIATING POSHTION SHOULD BE RECONSIDERED ACCORDINGLY.

MORGAN

INTERNATIONAL Eco (E)

TRADE

MCAD

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