CONFIDENTIAL ECO 5/36
1 June 1971
94
Hong Kong 1 Defence Contribution
I report separately, and briefly, on this point which was commented on in your letter of 10 May.
Cowperthwaite and Haddon-Gave both mentioned this question as an outstanding issue very difficult for the Hong Kong Government from the point of view of handling the "un-official members", but showed little desire to enter into more detailed discussion of the merits. Cowperthwaite did, however, as you had forecast make some remarks linking the question of the defence contribution with the question of a tariff on cotton textiles, putting the point, however, in a slightly different way from the general one of its effect on Hong Kong's economy and thus Hong Kong's ability to support a defence contribution. The particular point made related to the question of disruption of trade by the actual transition from quota system with annual allocations based on date of shipment to a tariff governed by date of arrival, In the terms in which Cowperthwaite put it, there is an anomaly here which (he said) has been recognised in London and yet after some months no firm reply has been received to recommendations made: in the circumstances the "un-official members" are (he continued) in no mind to conclude promptly a negotiation on the defence contribution.
I shall be writing separately on other aspects of my Hong Kong visit.
H.S. Lee, Esq., los
H.M. Treasury,
LONDON, 8.1.1.
CONFIDENTIAL
0.0. E.0. Laird, CMG, MBE,
F.0.0., LONDON, S.W.1..
C.W. FOGARTY.
B