SECRET
Formally, all the manufacturing and commercial interests with whom Mr. Lee and I discussed this matter in Hong Kong still press * that Britain should, as they put it, insist on Association for mg Kong. Mr. Loo did not himself go`into this matter in any detail. But on the subsequent visit that Mr. Lee and I paid to Hong Kong, at the beginning of December, with Mr. Lee's knowledge I myself had private discussions with one or two members of the manufacturing and commercial associations in Hong Kong, at which I Leve it as my view tint there was no prospect whatsoever that Britain would be able to secure Association for Hong Kong. In these private talks the Hong Kong representatives admited that this was the only realistic assessment that one could make. but they were keen that we should not pitch cur demands for Hong Kong too low at the outset, since they felt that if we did we should end up with a correspondingly less satisfactory outcome for liong Kong.
10. You will see that the brief for the Prime Minister and Forign secretary flagged in the attched bundel suggests that they should take the line that we should like Hong Kong to get Association in the same way as our other Dependent Territories; but that the Prime Minister and Foreign Secretary should go on to say that if Association hes' to be ruled out, we would hope for the type of solution towards which we were working during the 1961/63 negotiations. I think that this is in fact the realistic line.
The brief deals niso with the special position of Gibraltar, and of what we would hope to achieve for the other Dependent Territories; and I do not think I need comment specifically in this note. My main purpose was to let you know at the outset that we are likely to face a serious problem as regards Hong Kong, Although, as I have said, I believe thore 13 little joy that we can in fact get for Hong Kong out of any negotiations for a British entry into the
C. I am sure that we must show lleng Kong nt every tum that we are sympathetic to and understanding of their problems. Otherwiso wong Kong will simply feel thing we regard them as completely expendable. This will in fact be a very tricky matter to handle.
(A.N. Galsworthy)
19th January, 1967
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