LETTER
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full G.A.T.T. rights.
In the latter, G.A.T.T.
would be applied de facto in trade relations
between her and the Contracting Parties} she
would have no legal rights and no right to vote,
but she would be able to speak. In both cases
we should be required, as a preliminary, to
devolve to Hong Kong "full autonomy" in the
conduct of her external commercial relations.
The Hong Kong officials doubted whether these
solutions would be acceptable; they said that
the Colony did not have full autonomy in this
field and any proposal to alter the status quo
in that direction could be construed by China
as a move towards granting independence.
(e) the Hong Kong officials asked what would be
the effect of our entry into the E.E.C. in terms
of our own trade relations with Hong Kong.
They pointed out, and we agreed, that under the
terms of Article XXIV (1) of the G.A.T.T. they
did not and could not have any G.A.T.T. rights
vis a vis Britain as the metropolitan power.
On the other hand there was a inter-governmental
understanding in relation to cotton textiles,
running until 1970, This was centained in
Heads of Agreement accepted by both sides, but
mot in fact signed. Paragraph 14 of this
document provided for Hong Kong to withdraw her
co-operation in respect of quota restrictions on
exports in the event of tariffs being imposed.
We said that these problems seemed academic.
There was no reason to think that, even making
optimistic assumptions about the speed of
/progress