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I WONDER WHETHER THERE IS NOT SOME DANGER OF THEIR CHARACTER BEING ON THAT ACCOUNT MISINTERPRETED BY THE AMERICANS AND A SERIOUS CONFRONTATION RESULTING OVER HONG KONG, WHICH WE WOULD PREFER TO AVOID AT THIS STAGE. I MERELY MENTION THIS POINT FOR YOUR CONSIDER-
2079 ATION.
4. WITH REFERENCE TO PARAGRAPH 2 OF TELEGRAM 678, I WAS USING THE WORD "AUTHORITY' NOT IN THE SENSE OF PERMISSION BUT IN THE WIDER SENSE OF HONG KONG'S STATUS IN INTERNATIONAL NEGOTIATIONS. OUR FEAR, BASED ON EXPERIENCE, IS THAT EXPLICIT AND OPEN SUBORDINATION OF HONG KONG TO U.K. IN MATTERS OF COMMERCIAL POLICY TENDS TO UNDERMINE WHAT NEGOTIATING STRENGTH WE HAVE.
5. WITH REFERENCE TO PARAGRAPH 4, I SHOULD LIKE TO BE CONSULTED ON THE ARRANGEMENTS PROPOSED.
6. WITH REGARD TO PARAGRAPH 4 OF YOUR TELEGRAM 675, I CONSIDER THAT JAPANESE AND KOREANS HERE SHOULD NOW BE INFORMED THAT WE HAVE INVITED AMERICANS TO DISCUSS WITH US IN GENEVA.
FCO PLEASE PASS IMMEDIATE TO UKMIS GENEVA AND PRIORITY TO
WASHINGTON.
SIR D. TRENCH
[REPEATED AS REQUESTED]
INTERNATIONAL TRADE DISTRIBUTION
ADVANCE COPIES SENT
H.K.D.
COMMODITIES DEPT.
CONFIDENTIAL
ADDITIONAL DISTRIBUTION H.K. INT TRADE U.N.D.