789
16
Sir L. Monson
CONFIDENTIAL
18
Hong Kong
Further to my minute of 20 May, I should record that
most of the conversation between Sir J. Cowperthwaite and
me at lunch on 21 May was devoted to the problem of Hong Kong-
H.M.G. relations in the commercial policy field.
2.
Sir J. Cowperthwaite considered that there could be no
constitutional reason why we could not devolve upon Hong Kong
full responsibility for its own commercial policy decisions.
Nor did he see any strong reason why we could not persuade
other Governments that we had done so. On the other hand
he agreed that there were some respects in which Hong Kong
might lose H.M.G.'s support as a result - e.g. the two
points mentioned in paragraph 3 of my previous minute
generalised preferences and restrictions in the British market); but he did wonder just how much value Hong Kong would get on these matters from continuing in its present position.
3. As our discussion continued, I commented that the basic
difference in attitude between Hong Kong and ourselves towards the question of further bilateral restraints on non-cotton textiles lay in the fact that Hong Kong evidently
believed that small sacrifices would buy off the threat of
major restrictions in the U.S. market; whereas we were more
inclined to fear that such sacrifices would prove to be Lanegeld,
giving rise to yet further demands possibly in other fields,
of more importance to us than to Hong Kong. Sir John
commented on this that he thought that past experience
showed that sacrifices of this kind were more likely to
work in the way that Hong Kong expected than in the way we
feared. He cited the instance of restraints on cotton
textiles, reluctantly agreed to by Hong Kong at British
insistence and proved by experience to be of great value. [After
After this afternoon's talk with Mr. Philip Trezise at
the Board of Trade, I am even more inclined than I was
/before
CONFIDENTIAL