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did not consult us, or give us any prior warning, before introducing the amnesty. The Secretary of State may also wish to stress the importance we attach to ICAC's plainly being seen to continue as an effective anti-corruption
agency. Recent events have dealt a serious blow to Hong Kong's
image, and it is important that the Government should leave
no doubt of its determination to put matters right.
In the meantime, we have asked the Overseas Police
Adviser to consider ways of improving the organization of the Force. In particular we are seeking to strengthen the structure in order to improve communications between the rank
and file and senior officers: the failure of these communica-
tions was a major cause of the recent disturbances.
(c) Economy and Trade
Textile trade between the Community and Hong Kong is
regulated by a bilateral agreement concluded under the auspices of the GATT Multi-Fibre Arrangement (MFA), which regulates international trade in textiles. Both expire at the end of the year.
The Community is negotiating a new series of bilateral agreements with all its main low-cost suppliers. For
particularly sensitive items the Community's aim is to stabilize imports for 1978 at the level of actual imports in 1976. To do this while allowing for some imports from new
suppliers and no reductions in the quotas of the poorest developing countries (especially India and Pakistan), the Community are seeking cuts below 1976 levels from certain dominant suppliers, including Hong Kong. Hong Kong have bitterly opposed the idea of such cuts and the negotiations
have been difficult.
The British Government's position in these negotiations, as a member of the Community fully behind the tough negotiating
mandate and, at the same time, as the Government ultimately
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