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a limited extent on behalf of the Commission. As you know the Commission proposals in this field are not likely to be accepted without a struggle and certain member states (the Germans almost certainly and Benelux probably) will be trying to make them more liberal. If however Ernst can represent that the Commission proposals have already been agreed by Hong Kong, this will weaken the position of those member states which are liberally inclined. Nor an I convinced that informal contacts, via the Hong Kong Office alone, are necessarily the best way to influence the Commission itself in the internal tug of war over the formulation of its proposals.
5.
And although it seems clear that Hong Kong has separate rights under the GATT, the colony does not conduct its own external commercial relations in the sense of Article XXVI (5) (c). In these circumstances a more formal approach from
XXVI(5)(c). this Delegation could well be a useful first prong, perhaps followed up with certain exploratory contacts between Ernst and the Hong Kong Office, stopping short, however, of Hong Kong agreement to any Commission proposals.
6. In saying all this, I would not, however, wish to pour too much cold water on Ernst and on the idea of contacts with him. He is helpful and well disposed, and if we turn his suggestion down flat we shall not improve relations with him. I think, therefore, that we need to proceed rather carefully.
7. I would be most grateful if you could consider these points and let us have your view.
It does occur to me that we could usefully probe the Commission position by taking up at an early date Ernst's suggestion, made during Hughes' visit to Brussels, for a further discussion on trade policy towards Japan (Freddy Jackson's letter of 14 April refers). You should know that Ernst has invited himself to Hong Kong at the beginning of June on his way back from a visit to Japan.
(D. H. A. Hannay)
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