TNAG-0099-FCO40-135-Visit-by-Secretary-of-State-1967 — Page 71

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within the over-all restrictions on cotton textiles separate restrictions on broad "categories" of such goods; the levying of the import surcharge in 1964 (which hit Hong Kong, of all our dependent territories by far the heaviest, since it affected 95% of its exports to the U.K.); the dispute which arose in 1965 over the "carry-over" provisions; finally, the replacement in 1966 of "voluntary" controls under the Lancashire Agreement by quota restrictions imposed through U.K. import licensing procedures; all these actions have been regarded by Hong Kong as being prejudicial to the interests of a territory that must depend on trade to live and, as a dependent territory, looks to the U.K. to assist it economically. It is not only the restrictions

hemselves that hurt; it is the example the U.K. has set to other countries (the 1959 restrictions on cotton textiles were the forerunner of subsequent restrictionist arrangements in the cotton textile field under the G.A.T.T., of which many other countries have since taken advantage in their trade with Hong Kong).

4.

This is the sort of case against the U.K. that you may hear in Hong Kong. If so, it will no doubt be stated in the rather stark terms in which I have deliberately set it out above. Obviously a great deal can be (and has been) said in explanation and justification of the actions we have taken. But I do not propose to go into all that here, because this letter would then be well on the way to becoming amajor paper. Moreover, I am quite sure that it would not be profitable to be drawn into detailed argument on these matters.

5.

So much for the background. The Governor has made a number of suggestions about the form any U.K. gesture might take and we are looking into these. They include:-

(a) The possibility of using some aid-money already ear-marked

for S.E.Asia to erect, say, a training facility in Hong Kong, with participation by the Hong Kong Government; the facility would be used both by Hong Kong and by countries nominated by the U.K.

(b) The prompting of some wart and friendly references to Hong

Heng in public utterances here (e.g. by Ministers) or in the

press.

(c) Some further manifestation of interest by the Royal Family

in Hong Kong. There is a proposal under consideration that The Queen might visit Hong Kong in 1968 to open the Plover Cove Water Schene. A visit by the Sovereign raises many difficulties and is not likely to be a starter; the Governor

recognises this and has made the alternative suggestion that this could be an easy way of introducing Prince Charles to Reyal duties of this nature. We are looking into this. Other suggestions by the Governor that we will be pursuing at an appropriate time are visits by Princess Margaret to the Hong Kong Government Office in Pall Mall and by

Princess Alexandra to Hong Kong liou se, a residential and recreational centre in London for Hong Kong students. #It would incidentally be a nice gesture for the Secretary of State to offer to visit one or other of these scon after his return to the U.K.

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