For Mr. Carter's Use
CONFIDENTIAL
Informal Note
UKTERNAL
MANAGEMENT OF HONG KONG'
COMMERCIAL RELATIONS
H.R.G. is responsible for Hong Kong's external commercial relations as part of her overall responsibility for the Colony's affairs. However, because of the size, pattern and growing complexity of Hong Kong's trade, it has been accepted as a matter of practical convenience that the management of certain areas of the Colony's bilateral commercial relations should be conducted by the Hong Kong Government. Examples of this are :
(a) negotiations under the Cotton Textiles
Arrangement (which ..G. has
specifically accepted on behalf of Hong Kong as well as the United Kingdom);
(b) arrangements with Germany on woollen
knitwear and with Canada on certain garmonts of man-made fibres;
(c)
consultations with Austria and South africa on the effect on Hong Kong of their anti-dumping regulations;
2.
(a)
tariff consultations under Article XXVIII of the G... 1. 1. (e.g. with the United States).
It has been accepted that all these consult- ations or negotiations are either conducted within the confines of international instruments accepted by H.M.G, (e.g. the Cotton Textiles Arran enent) or that the policy issues involved are fully discussed and agreed With H.M.G. beforehand and that the latter concurs with the broad line to be taken by Hong Kong in any particular in tance. In each case (other than in certain cotton textile matters) the concurrence of H.M.G. has been required before Hong Kong can formally conclude any binding agreement.
3.
In considering the policy issues involved. H.M.G. while keeping fully in touch with the Hong Kong Government through the Commonwealth Office, makes its decisions through the normal interdepartmental machinery (i.e. H.H.G. as a whole, and not one department acting on its own, exercises the power of decision). In this process, the interests of Hong Kong are represented by the Commonwealth Office.
4.
It has also tended to be accepted hitherto that, in considering questions of Hong Kong's external commercial relations, the interests of Hong Kong should be paramount and that the views of the Hong Kong Government in interpreting those interests should normally be accepted. Only when very strong reasons of U.K, policy or wider international considerations run counter to the Hong Kong view should this be overruled.
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