TNAG-2244-FCO40-3225-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 32

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FM WASHINGTON

TO ROUTINE FCO

TELNO 2845

OF 042222Z NOVEMBER 91

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MDLIAN 1694

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INFO ROUTINE PEKING, HONG KONG, BTC HONG KONG, DTI, UKREP BRUSSELS

(214)

ONG KONG,

HONG

MY TELNO 2658: US/CHINA: TRADE ISSUES

SUMMARY

1.

US HOLD OFF ANNOUNCING A RETALIATION LIST PENDING A FURTHER ROUND OF TRADE TALKS IN WASHINGTON. SECRETARY BAKER'S VISIT TO CHINA PROBABLY A FACTOR IN THE DECISION.

DETAIL

MASSEY

2. MASSEY (USTR), WHO LED THE TEAM IN THE LATEST US VISIT TO PEKING, DESCRIBED TO US ON 4 NOVEMBER THE STATE OF NEGOTIATIONS WITH THE CHINESE IN THE SPECIAL 301 (INTELLECTUAL PROPERTY MATTERS) AND SECTION 301 (IMPORT BARRIERS) CASES.

3.

MASSEY SAID THAT THERE HAD BEEN NO (NO) PROGRESS ON INTELLECTUAL PROPERTY. ON IMPORT BARRIERS, THE US HAD MADE SOME PROGRESS: CHINA HAD NOW DEFINITELY UNDERTAKEN, IF THERE WAS AN AGREEMENT, TO REMOVE THE IMPORT REGULATORY TAX WITHIN SIX MONTHS AND TO REDUCE THE NUMBER OF PRODUCTS SUBJECT TO IMPORT LICENSING BY

TWO-THIRDS OVER THREE YEARS. THE CHINESE CONTINUED, HOWEVER, ΤΟ AVOID FIRM COMMITMENTS IN OTHER AREAS.

4.

THE CHINESE HAD ACCEPTED AN INVITATION TO TALKS IN WASHINGTON, ON BOTH INTELLECTUAL PROPERTY AND IMPORT-BARRIER ISSUES, FROM 19-22 NOVEMBER. NO (NO) DECISION ON RETALIATION IN THE SPECIAL 301 CASE WOULD BE MADE UNTIL AFTER THOSE TALKS. (THE DEADLINE IS 26 NOVEMBER: THE ADMINISTRATION MAY EXTEND THE INVESTIGATION BY THREE MONTHS IF CHINA IS MAKING ''SUBSTANTIAL PROGRESS IN DRAFTING OR IMPLEMENTING

MEASURES'' FOR ''ADEQUATE AND EFFECTIVE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS''.) MEANWHILE WORK CONTINUED ON A DRAFT RETALIATION LIST BUT THIS WOULD NOT (NOT) NOW BE PUBLISHED IN

ADVANCE OF THE 26 NOVEMBER ANNOUNCEMENTS.

5.

..

MASSEY SAID THAT SECRETARY BAKER, WHOSE VISIT TO PEKING IN MID-

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