CONFIDENTIAL
So much then for the next step.
With regard to the
questions on page 5 of your letter of 20 December, the
answers are:-
a.
there is some disenchantment in London with the
Hong Kong Government's decision; I am not sure how
far this will affect decisions on other issues;
undoubtedly it makes the task of those who would like
to look after Hong Kong more difficult.
b.
the answer to this is subsumed in the answer to
(a); we have never had any doubt here that the Hong
Kong Government would have to be allowed to take
their own decision. Equally, that they would have to
stand by it if they found that at some future date
they were called upon to honour a guarantee.
in the circumstances any such guarantee would have
to be met from the Colony's financial resources and
not from those of HMG in the UK.
Clearly
C.
whilst a direct subsidy from the Japanese Government
would undoubtedly be contrary to the relevant GATT
Declaration on Export Subsidies of 1960 to which the
Japanese Government have subscribed, we are not very
hopeful that they would provide a subsidy in a way
which allowed us to demonstrate that the Japanese
Government were in breach of their obligations.
Normally these things seem to be done, if they are
done, by financial manipulation behind the scenes.
Nevertheless, should you or Tokyo pick up any specific
evidence about Japanese Government subsidisation we
in London would be most interested.
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