CONFIDENTIAL
United Kingdom Relations with Hong Kong
For some years now it has been clear that the interests of
Hong Kong as a major exporter, exxexixxxxxxportxxbxexixngx. xixnxxtxexxixixxexs
jbothx.xxxxtxbox xandxxxxxxxxxtxbox, are not the same as those of the
United Kingdom, who, although herself a substantial exporter,
is primarily a major importer and domestic producer, xxxxxxxxixixx
xxfxxtxexxtxixbes. This is especially the case in the field of textiles.
2. It is the general policy of both Hong Kong and the United
Kingdom to support measures designed to liberalise international
trade. Difficulties have arisen, however, over the form of the
approach to particular issues. It is a fundamental part of our
policy to support the principles enshrined in the General Agreement
on Tariffs and Trade (GATT) and to resist restraints on trade
which we regard as unjustifiable. Hong Kong, on the other hand,
is
being much more dependent on exports than the United Kingdom and
with much less bargaining power in negotiations with other countries,
understandably tends to take a less firm view. In general, Hong
Kong would prefer to negotiate under duress and to make the best
deal possible rather than run the risk of having unilateral
restrictions imposed on her exports by her trading partners.
This attitude can be explained in part by the fact that Hong Kong
attaches great importance to her free port status and is reluctant
to take to herself the right to retaliate against the goods of a
country which is discriminating against the Colony.
So far as cotton textiles are concerned
3. A Our relations with Hong Kong in this field xxxxxxxxxxxxxxtxixixes
have evolved gradually over the years and cottons as such now
present no problems. With the development of man-made fibres,
however, new difficulties have come up, particularly in the field
of Hong Kong's external commercial relations. These have arisen
CONFIDENTIAL