*** K...
spoken to UK officials and has confirmed that cuts
will be necessary from Hong Kong as from the oth
'dominant suppliers, South Korea and Taiwan in
;
order to ensure that no cuts need to be applied to the
poorest developing producers (especially India and
Pakistan) and some room be left for newcomers and small
suppliers without risking overstepping the global ceilings.
Nevertheless, the Governor of Hong Kong has expressed
sety
3.
amxie
serious conción about the Commission proposals, asking us to
help Hong Kong secure better terms and implying that there
could be repercussions for the China Light and Power deal.
in which I know that you are particularly interested.
The Governor also fears that tough terms from the
Community will cause the Americans and possibly others
like Norway, Sweden and Canada to claim similar treatment.
All this, the Governor has warned, could add up to an
abrupt shock to employment in Hong Kong, the economy
there, confidence and attitudes to the UK who he thinks
would be held responsible for the ERC'o action.
4.
I believe the Governor may have overrated the likely
effect on Hong Kong of cuts of the order muggcated by the
Commission. Those should not, as he fears, really bringt
into question the implementation of Hong Kong's social
reforms, to which I attach a great deal of importance. Also his worries about the US could weil be exaggerated
because the US would doubtless recognise that any downward
revision of their agreement with Hong Kong could lead to a
further downward revision of the EEC's agreement and thus
to a serious spiral of further protectionism which the US,
with the MTNs in mind, will be concerned to avoid.
Nevertheless, we have a duty to protect the interests of
Hong Kong, in view of its dependent status, and, where these
!
Son Blier