CONFIDENTIAL
that he would have to ask for "further elucidation and elaboration, particularly in connection with the resolution of conflicts of interest and the source of, and channels of, authority". He subsequently indicated that he would pursue the matter during his leave.
17. This statement barely survived its first test, in the negotiations with the Norwegians last month about renewal of existing restraints and new restraints. The Board of Trade were inclined to argue that, though the principle of voluntary restraints had been conceded, each set of negotiations would require their specific approval; and Hong Kong took a very cavalier view of what constituted "full consultation and association with H.M.G.".
But
18. The department has clearly got to give a lot more thought to this problem before discussions take place with the Governor. We cannot accept the assertion reportedly made to Mr. Hughes that over the last two years Hong Kong have lost a measure of authority and control in this field.. As we see it difficulties have arisen because for the first time we have been faced with a major conflict of interest for which no ready solution could be found (partly, we suspect, because of some of the personalities involved - on both sides). this does not mean that there is a case for Hong Kong "going independent", with all the consequences that this might entail. 19. We shall have to consider very carefully the practical problems involved in any formal devolution of authority to Hong Kong e.g. the difficulty of representation in international organisations or agencies where Hong Kong representatives must form part of the British delegation while speaking separately and possibly expressing opposing views. There is the question of whether it makes constitutional sense to devolve authority formally on an "official" government, as distinct from a locally elected administration that is heading for
/complete
CONFIDENTIAL