down;
and
Whether they feel strong
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to this course are decisive.
The Chinese could scarcely be
expected to accept that this step was being taken solely to
achieve a limited objective connected with British entry into
the EFC;
they would be only too likely to consider that
autonomy in external economic relations was a major step
towards independence in other spheres and to react strongly
against it.
-16.
e.g. by
The only alternative which we can think of would be for
Hong Kong to protect herself by practical methods
imposing and then suspending a tariff, which could be
reimposed against particular countries in defence of GATT
rights. Another obvious possibility is action in the field
of public purchasing. We know that Mr. Cowperthwaite
personally is very much opposed to any departure from
Hong Kong's traditional policy of buying in the cheapest
market. Nevertheless, in 1966/7 Hong Kong's recurrent and
capital expenditure, after deducting personal emoluments and
pensions, is estimated at nearly £79 m., which would seem to
give her a sizeable bargaining counter. Whether or not
Britain joins the Community, we see no reason why the
Hong Kong Government should not direct contracts towards
countries which provide good outlets for Hong Kong exports
rather than towards those which impose highly restrictive
quotas. (In making this point it would be as well to add
that it would be awkward for the British Government if
Hong Kong began to discriminate between members of an
enlarged Community only after Britain had joined. It would
therefore be better if Hong Kong were to initiate any such
policy before we join.) In short, if the Hong Kong
Government feel the need of a means of defending their GATT
rights directly, the best advice we can give is that they
should seriously consider measures on the above lines.
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/17. In
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