(118281) Dd. 391599 1,500M 2/69 Hw.

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry

No.

CURITY CLASSIFICATION

Top Secret. Secret.

Confidential. Restricted. Unclassified.

PRIVACY MARKING

DRAFT

LETTER

To:-

His Excellency

Sir David Trench, GCMG., MC.,

Government House,

Hong Kong

DRAFT B

Type 1 +

From

Sur L. Monson

Telephone No. & Ext.

Department

In Confidence

сору Copy in draft

Conduct of Commercial Relations

We have completed our consultations with other

departments on the revised draft statement that

emerged from our further discussions with you on

9 December. For ease of reference I attach a copy of that draft, in which the additions then made are

underlined.

2.

There is general acceptance of the additions to

paragraphs 1 and 3 and of the new paragraph 8. But

our consultations have raised certain doubts about

the application of the statement to the proceedings of international organisations.

3. I understand that at the meeting on 9 December

you were told that Eugene Melville had expressed misgivings on this score. He was particularly concerned about the possibility that Hong Kong representatives might speak in divergent terms on policy in GATT or other international organisations, e.g. UNCTAD. He considers it dangerous to attempt to reduce to a written concordat the relationship in the GATT field; indeed, if we understand him correctly,

he feels unhappy about any further attempt to formulate written guide-lines for the conduct of

commercial relations.

4.

I see mi pout but I fear that an

Things have develifed

Whatever the merits of avoiding a written

formulation, I think it must be accepted that matters

have gone too far to draw back now and that you need some further elaboration of the rough guide lines prepared in September last year to show to your

Executive Council. We must therefore address

ourselves to resolving the doubts that are felt about

the application of the proposed statement.

/ 5.

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