(118281) Dd. 391599 1,500M 2/69 Hw.
NOTHING TO BE WRITTEN IN THIS MARGIN
Registry No. HKK. 6/18.
SECURITY CLASSIFICATION
Top Secret.
Secret.
Confidential.
Restricted. Unclassified.
PRIVACY MARKING
..In Confidence
and above all with out specific Ministerial
direction)
/21/xi 21/xi
✓
DRAFT
To:-
Domestic Item No. 9
Type 1 +
From
D
Telephone No. & Ext.
Department
CONDUCT OF HONG KONG'S COMMERCIAL RELATIONS
In August there were discussions with Hong Kong
representatives about the constitutional position with regard to Hong Kong's exercise of responsibility for
the conduct of its commercial relations. This issue
arose in connection with impending negotiations between Hong Kong and Canada over arrangements for the
restraint of Hong Kong exports of non-cotton textiles.
For reasons of broad policy, we sought to intervene in
the conduct of the Canadian negotiations, to delay their timing and influence their outcome. Hong Kong, faced with the prospect of arbitrary and damaging
Canadian action against its trade, pressed for their early conclusion in a manner that would safeguard the
Colony's trading interests. The Governor, who considered that he had been overruled in this matter
"by the erratic use of HMG's constitutional powers", asked for a statement defining the extent to which in practice HMG's admitted constitutional powers should
be exercised for communication to his Executive
Council and Textile Advisory Board which were questioning HMG's right to subordinate Hong Kong's
interests in this way.
2. A statement was agreed (see Annex A), which the Governor acknowledged would hold the position for the
time being. But he warned that he would have to ask for "further elucidation and elaboration, particularly
in connection with the resolution of conflicts of interest and the source of and channels of authority"
/Constitutional
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