Reference.

CONFIDENTIAL

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Mr. Carter (Hong Kong Department)

Conduct of Hong Kong's Commercial Relations

I had a word with Mr. Goldsmith on the telephone this morning about Sir E. Melville's letter to him of 23 December.

2. It was clear that Mr. Goldsmith had been informed only at second-hand of what has already taken place in regard to the preparation of a draft statement on this subject. I gather that you are still considering the terms of the proposed letter from Sir Leslie Monson to Mr. Hughes because of the complication introduced by Sir E. Melville's letter of 3 December. It is not Prey clear from Sir E. Melville's latest letter of 23

December whether he is now saying that the whole idea of an agreed policy statement between the U.K. and Hong King authorities should be scrapped or whether he is simply proposing to drop his suggestion for something to be added about the position in regard to meetings of international organisations. It is obviously too late now to reopen the first of these alternatives. In regard to the latter, possibily, in view of Sir F. Melville's attitude, the position of everyone would be sufficiently safeguarded if there were some reference in the statement to its not applying to meetings of international organisations at which Hong Kong's representation is covered by H.M.G.'s membership.

3. I understand that Sir E. Melville is visiting London from 14-16 January and it may well be that he will want to discuss all this both in the FCO and in the Board of Trade during that visit. It might, therefore, be useful if an FCO view could be worked out and communicated to the Board of Trade before that visit takes place. Mr. Goldsmith asked that any letter to the Board on this subject should also deal with the point made by Sir E. Melville about the terms of reference of Mr. Jones.

(G.S.Whiteread)

Commodities Department 6 January 1970.

CONFIDENTIAL

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