(134392) Dd. 737115 750M 4/70 Hw.

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

SECURITY CLASSIFICATION

Top Secret.

Secret.

Confidential.

Restricted. Unclassified.

PRIVACY MARKING

..In Confidence

CONFIDENTIAL

DRAFT

DESPATCH

To:-

His Excellency

Sir David Trench,GCMG, MC

Hong Kong

Type 1 +

From

Telephone No. & Ext.

Department

I have the honour to refer to the question of

relations between Her Majesty's Government and the

Government of Hong Kong in matters of overseas trade

including textiles in particular.

2. For some years now it has been clear that the

interests of Hong Kong as a major exporter of

textiles, both cotton and non-cotton, are not

necessarily the same as those of the United Kingdom

who, although herself a substantial exporter,

is

primarily a major importer and domestic producer

of such goods.

3.

Relations in the field of cotton textiles have

evolved gradually over the years and cottons as

such no longer present problems. I have now decided

that it would be in the interests of both the United

Kingdom and Hong Kong if the Government of Hong

Kong were to exercise the same degree of indepndence

of action on non-cotton textiles as at present on

cotton textiles: and I hereby give you authority

to act within the terms of this despatch.

4.

Relations between Her Majesty's Government and

the Government of Hong Kong in the field of cotton

textiles are based on the provisions of the "Heads

of Agreement" negotiated in 1965/66 and regarding

international trade in cotton textiles on the terms

of the Long Term Arrangement (LTA). The United

CONFIDENTIAL

/2.....

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