LETTER
on the foregoing questions are as follows. We
shall be grateful if the Foreign Office Legal
Advisera who we understand to be the experts in
questions of interpretation of the G.A.f.T., would
cast their eye over paragraph 2 above, say whether
they consider the line taken with Hong Kong officials
to be legally sound, and indicate whether there are
any additional legal points which they think we
should put to the Hong Kong delegation in the next
round of consultations,
مكة
Provision
As regards (c) the Hong Kong officials told us
that they had already considered the possibility of
constructing a tariff (they have none at present),
suspending it, and then invoking it against any
countries which treated Hong Kong badly.
would presumably have to be made, in the context of
any such tariff arrangements, for the establishment
of a free port ures so as not to prejudice Hong Kong
role as an entrepot which is again growing. We nee
no reason why we should not press Hong Kong further
on these linse.
5.
As regards the use of Hong Kong's public
purchasing policy as a bargaining counter, we have
done a little preliminary research, We found that
the Hong Kong Government's recurrent and capital
expenditure in 1966/67, after deducting personal
emoluments and pensions, is estimated at nearly
£79,000,000. This is a pretty formidable amount.
In our consultations the Hong Kong delegation
implied that the Hong Kong Government would be very
unwilling to use Government purchasing power for
political ends, and could not afford to do otherwise
than to stick to the principle of buying in the
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/cheapest
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