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Reference HKK 6/304/1

manage the discussions; or for yet another that this signalled the start of a new era in the handling of Hong Kong's commercial relations characterised by increased UK participation. Mr. Dunnett is no doubt perfectly well aware of all this, but it is necessary to say that there is possibly even more risk than is reflected in the Submission of this misinterpretation being placed on the presence of a UK representative. I regret that I do not think that the danger will necessarily be removed by the tactful wording which Mr. Dunnett proposes for paragraph 5 of his draft telegram.

7.

I am inclined to add to Mr. Dunnett's another argument against UK participation on which I think at least some members of his Department and we may well be agreed. This is that as one round of Hong Kong trading negotiations succeeds another the sheer practical difficulties of too great UK involvement become more apparent. These compli- cated trading negotiations come upon us often with little notice and to concert the Board of Trade's view with our own in time for our views to have tactful but useful bearing on the course of dis- cussions can be a near impossibility. We have been close to occasions when the absence of staff on leave or their preoccupation with other trading issues brought us close to failure. Mr. Dunnett is right to say that on this occasion something of a precedent is being set for future negotiations and we do not want to set a precedent which we may prove incapable of maintaining.

8.

You will note that Mr. Dunnett sees "less need for a UK participation of a quasi technical kind". He

does not favour Board of Trade represen- tation and with respect I entirely share his view that we must leave it to Hong Kong to deal with what is essentially a bilateral commercial occasion inspite of its multilateral implications.

9. I apologise for dealing at such length with a matter which may well be already decided but with respect I think that even at this stage we might make a Departmental contribution on the following lines. Could we not preserve the undoubted advan- tages of demonstrating our moral support for Hong Kong in this matter, while avoiding the dangers of too much involvement in the discussions them- selves, with the accompaying danger that this will damage our relations with the Colony, by sending our representative before Mr. Stans arrives? If he was still there when the American party arrived and demonstrated our solidarity of purpose by attending perhaps the first session of talks as an observer, but with a remit to play any useful part he tactfully could, then that would be excellent. But if he then withdrew and returned to London I think that the Hong Kong Ministry of Commerce would be left with no grounds at all to suspect our motives, while it should have been possible for him to administer the necessary stiffening of Hong Kong's commercial purpose to which Mr. Dunnett refers. I have to admit that the course which the latest round of "wedish negotiations has

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