CONFIDENTIAL
9
Special problems of Hong Kong
8. The Financial Secretary said that another worry for Hong Kong was that since 1967 there had been an increasing involvement by Her Majesty's Government in Hong Kong's external commercial relations with other countries. In the context of the United Kingdom's application this was a matter of concern as Hong Kong had no GATT relationship with the United Kingdom; the situation was one of dependency and metropolitan country. If the United Kingdom became part of the EEC she might therefore be forced, in pursuing the common commercial policy, to adopt policies in conflict with the GATT and detrimental to Hong Kong. In these circumstances to whom could Hong Kong turn? Mr. Rippon noted this difficulty and with regard to the increasing involvement of Whitehall in Hong Kong's affairs said that he thought that in part this might be due to the formation of the Ministry of Technology which, being primarily responsible for Her Majesty's Government's policies for British industry, took a keen interest in the effects upon British industry of policies hitherto dealt with by the more outward looking Board of Trade and Foreign and Commonwealth Office. Mr. Jordan also pointed out that with the abolition of the Colonial Office it had become clear that the conventions governing relations between Whitehall and colonial Administrations had to some extent been forgotten. He instanced the convention that Governors should not be overruled by Whitehall civil servants without reference to Ministers. This had got lost and this had caused great difficulties in Hong Kong last year.
9. Mr. Rippon thought that it was right that the Hong Kong Civil Service was identified with Hong Kong and not with Whitehall. The Financial Secretary agreed and added that in his view the business community in Hong Kong recognised that the Hong Kong Government was on their side, and not an instrument for the introduction and application of Her Majesty's Government's policies for British industry to Hong Kong. Mr. Jordan said that there appeared to be a strong feeling in Whitehall that if Her Majesty's Government accepted a policy for Hong Kong which was different from United Kingdom policy, then foreign Governments would think that United Kingdom policy had changed. But this just was not true. In his travels over the past two years conducting Hong Kong's negotiations with foreign Governments this had never been suggested and he could not see why there should be difficulty for Her Majesty's Government to accept different, which did not necessarily imply conflicting, policies for Hong Kong and the United Kingdom.
10. Mr. Rippon said that, if it were not for the geographical and political situation of Hong Kong, the colony would have achieved independence a long time ago. As it was this could not be. The Financial Secretary, while agreeing with this, pointed out that the political difficulties which might arise with China could be over-emphasised and he was not personally convinced that, say, autonomy in the GATT would lead to political repercussions with China. Mr. Haddon-Cave commented that the problem of Hong Kong for Whitehall was that Britain had never before had a colony which had become a significant exporter of light manufactures and Whitehall was not sure how to deal with it.
Hong Kong/United Kingdom cotton textile agreement
11. Mr. Haddon-Cave went on to ask if any consideration had been given to the situation arising from the fact that the Hong Kong/United Kingdom cotton textile agreement expired on 31 December, 1970, and the tariff would not be introduced until 1972. Mr. Rippon said that he understood this was a matter which the Board of Trade and Mintech were considering.
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CONFIDENTIAL
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