CONFIDENTIAL
HKK 6/18
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Mr. Rushford
I have been asked to look into the problem of how we can best handle Hong Kong's commercial relations with 16 other countries. Please see Mr. Bottomley's minute to
Sir L. Monson of 20 May and Sir L. Monson's reply of 26 May.
Any examination of this matter must also, for reasons which I shall explain, include commercial rela- tions between Hong Kong and the United Kingdom.
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2. Before we can come to any conclusions, there are constitutional and legal questions on which I would welcome your advice. These are set out below. I have included every aspect of the problem I can think of, but if anything else occurs to you I should be grateful if you would mention it.
The Constitutional Position
3. HMG would seem to have full powers over every governmental activity in Hong Kong but, as Sir L. Monson pointed out in his minute, that in itself is no reason why we should exercise powers which we would not want to exercise. Having regard to the constitutional position, would it, in your opinion, be possible to delegate a measure of responsibility to the Hong Kong Government, either formally or informally?
4. As I understand the position, the Hong Kong Government is already in many respects virtually self-governing, certainly in internal affairs. This situation seems to have developed gradually over the years in line with our policy generally towards dependent territories on the road to independence. Apart from the Letters Patent and the Royal Instructions, I cannot, however, trace any document giving any kind of delegation of power to the Hong Kong Government.
5. My first question is, therefore, is there any precedent of which you are aware which would help us to achieve the arrangements referred to in Mr. Carey's Flag 3 minute below of 8 June ? If not, I would be grateful for
your views on the constitutional and legal implications of this proposal. The concordat to which Mr. Carey refers in paragraph 5 of his minute is at (23).
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Cotton Textiles Arrangements
6. Narrowing the problem down, I would invite, your attention to the copy (enclosed loose) of the Long-Term Arrangement regarding international trade in cotton textiles. You will see from the "Introduction" on page 3 of this document that "the countries party to the Long-term Arrangement" include Hong Kong. In practice, the Hong Kong Government negotiates bilateral arrangements under the terms of the LTA in which we take no part. These arrangements seem to be acceptable to other countries although, as you will see from the documents at (24) - Flags Eb (31) (extracted from the records of Nationality and
Treaty Department) for the purpose of Article 102 of the Charter of the United Nations, these agreements or perhaps more correctly "arrangements" between Hong Kong
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