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BOARD OF TRADE
1 VICTORIA STREET
LONDON S.W.1
7 Cctober 1970
Foreign and Commonwealth Offichest wuhe,
Great George Street LONDON S W 1
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I am replying in Hughes
absence to Wilford's letters of
Gy91) 17 September and 1 October. We have been considering the
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implications of the extension of the delegated authority, and the timing of the delegation.
In the first place, the extension of the delegated authority outside the textile field must surely supersede the assurances given to Hong Kong in 1958 to the effect that FIG would not seek voluntery arrangements with Hong Kong beyond the field of cotton textiles. This assurance was repeated in 1961. Under the arrangements now proposed, where Hong Kong has accepted restraints vis-a-vis a third country, we would in the future be able to request similar restraints from Hong Kong subject to the qualification that FIG will act "in accordance with their normal liberal trading policies and GATT principles". With the extension of the delegated authority to cover commodities outside the textile field, our right to require restraints from Hong Kong would equally be extended outside the textile field. We should like to be assured that this aspect has been taken into account, not least by Hong Kong.
Second, there are questions of timing. In the medium term we wonder whether it will be to the advantage of Hong Kong, having regard to our possible membership of ZEC, to be seen to be acting independently in trade matters. We think Hong Kong should consider carefully whether there might be prejudice to our attempts to look after her interests vis-avis the Community.
The more immediate point of timing is that we would not think it the most appropriate moment to delegate further authority to Hong Hong whilst we are still engaged with the US over their proposed trade legislation. In the immediate future, the negotiations between the four powers are certain to be delicate, and we think it