Para 5
Ion will no doubt bear in mind that, a
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industry
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-2-
in the event be done. Moreover, as she has no protective tariff, Hong Kơng has no obvious means of reprisal and as she depends entirely on international trade for her welfare ahe would regard a policy of retaliation in any form as contrary to her general interests."
I suggest that this paragraph should begin as follows:-
"With regard to voluntary export restraints it seems advisable to warn Hong Kong that a policy of attempting to buy off the United States with restraint arrangements on individual types of textiles is almost certainly likely to lead many other countries to demand similar restraints against Hong Kong. If such a development ensued Hong Kong will appreciate that the U.K. would probably, feel constrained to follow suit. It seems advisable
Paras. 8 and 9
I agree broadly with what is said in the submission although I think para.9 should be shortened considerably. This might be done as follows:-
"2(0).
The Hong Kong representatives might feel that their authority was in question if a U.K. represen- tative were present at the talks. Although the fact is that Hong Kong has no independent authority in the commercial field we have our reasons for wanting to make it appear that Hong Konɑ, has acquired de facto 0.A.T.T. rights.
*903).
The domestic textile industry in Hong Kong may be inclined to suggest that Hong Kong's Interests are being subordinated to British interests where the two are different.
*9(c). In the last resort it may be easier for us to curb any Hong Kong desires to act contrary to our wishes if we are not party to the talks with Mr. Stans."
The Draft Telegraz
2.
I should like the beginning of para.4 amended to coní óra to the amendment to the beginning of para.5 of the submission which I have proposed. I think the last sentence of para.4 should be amended to read as follows: –
3.
"It is likely that the Americans will argue that voluntary restraint arrangements with Norway, weden, West . Germany and Canada have conceded, as far as Hong Kong is
concerned, the principle of restraint on non cotton textiles. So far as we can judge, the only possible line of reply. for you is that these were all very special cases and the United States can show in respect of particular textile products that they have similar cases, both the Hong Kong · and British Governments would be prepared to consider them without commitment."
Since dictating the above I have som Xr. Stewart's minute to you of April 29. I think he has over-emphasised the relevance of Article II. As it stands, that Article can only be invoked
in/