Mr. Milne
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Your minute of 18 March.
We have had no comment from Hong Kong on the Prime Minister's letter to Mr. Nixon. Presumably they concur in the proposal that a solution be found "in the GATT forum", and "within a GATT framework". These terms imply a multi-national meeting convened or processed by the Organisation, perhaps even by the C.T.C., and a wish not to depart from the precepts of the GATT, but Hong Kong will wish to know more precisely what we mean and where we are going, and to be kept informed of each stage in any discussions.
2.
Para. 2 of Mr. Dunnett's draft rightly sets the discussion in perspective, but the paper as a whole gives no answer as to where we are going. We may or may not wish fully to disclose our position to the Americans at this stage, but it is important, not least for political reasons in the context of Anglo-US relations and of HK-UK relations, to decide how far we intend to go. in different situations and how far Hong Kong's interests will be affected. The draft suggests we are uncertain, even though taken at face value we are perhaps arguing, even if obliquely, for a solution close to the one proposed by the Japanese,
3.
The Japanese attitude even though orthodox has at least the merit of clarity. No time limit is set for the operation of any provisional res-
A of the Aide-Memoire. traints (paras. 2(3) and 11(2)), they would per-
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haps concede a period of up to a year, but if they felt the Tariff Commission or others were prevaricating, they would probably insist on more narrowly and specifically defined provisional terms They seem not to intend an indefinite period restraint in the absence of compelling justification. If this position can be held, Hong Kong interests will probably be served better
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