TNAG-0138-FCO40-174-Conduct-of-Hong-Kong-commercial-relations-1969 — Page 183

Suggested Statement to the Hong Kong Textile Advisory Board

The constitutional position is that HMG is responsible for the conduct of Hong Kong's external relations (including commercial relations).

2.

Nevertheless, HMG have recognised that in matters not affecting considerations of British international commercial policy the Hong Kong Government should determine the course of, and where practicable be responsible for the conduct of, Hong Kong's external commercial relations.

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3. Where considerations of British international commercial policy are involved the Hong Kong Government may, as appropriate and in full consultation and association with HMG, exercise a similar responsibility, acting within the framework of policies agreed with HMG and in conformity with treaty obligations.

4. So far as non-cotton textiles are concerned, HMG recognise that, with their agreement, the Government of Hong Kong have been following a policy, when a situation has arisen such as one in which Article XIX of the GATT might otherwise have been invoked, of agreeing to export restraint on non-cotton textiles where it seemed in the best interests of Hong Kong to do so.

5. In the light of recent international developments in the sphere of textiles, HMG are at present urgently reviewing their policy as it affects both the U.K. and Hong Kong, and in doing so they will take full account of the representations recently made to them by the Government of Hong Kong. They will continue to keep in touch with the Hong Kong Government so far as the interests of that Government are concerned.

6. They do not wish to propose ally change in the meantime in The policy described in paragraph 4 above as far as Hong Kong is concerned. In particular, HMG accept that, so far as the negotiations with Canada are concerned, there is a need to reach agreement with the Canadian Government on a basis which would enable trade to continue at a level acceptable to the Government of Hong Kong. They are therefore agreed that, if no other arrangement can be made with the Canadian authorities which would safeguard Hong Kong's position in the Canadian market, it will be necessary to agree to a continuation of the existing restraints, including if necessary their extension to cover polyester/polynosic shirts, for a further period at a level which the Hong Kong authorities are satisfied is the best which can be obtained in the circumstances.

7.

HMG have also agreed with the Government of Hong Kong to examine whether the procedures for such consultation as is required between the two Governments in connection with negotiations on non- cotton textiles can be improved.