Draft Telegran to Hong Kong
Repeated to Washington:
Mr. Stans' Visit.
U.K.Mie: Geneva.
You will have seem the record of Mr. Stans' conversations
in London contained in my telegram No. 954 to Washington.
2. Against this background it seems that the main interest of all concerned lies in maintaining the generally solid front of opposition with which Stans has been faced on his proposal
(for a conference to extend the L.T.A. We suggest therefore that,
as you were no doubt already intending, the main burden of your remarks to him should be to stress the importance for Hong Kong, on political as well as commercial grounds, of maintaining and developing the liberalisation of world trade, and of avoiding the introduction of any new restrictions, particularly in the field of textiles which form such a high proportion of Hong Kong's exports. This is broadly in line with the position indicated in your telegram 296.
3. It would seem advisable to keep out of sight if possible Hong Kong's preference, in the last resort,(for reasons which we quite appreciate) for the extension of the L.T.A. rather
than the introduction of voluntary export restraints or import
quotas. It is not impossible that, given the least opportunity, Stans might represent this as a qualified readiness to accept
the extension of the L.T.A.
4. You should also bear in mind the legislative position in the U.S. as explained in London by Mr. Nehmer 1.e. the fact that their present legislation gives the U.S. Administration authority to impose quotas only where there is a pre-existing bilateral arrangement or multilateral arrangement, and that, at least in Kr. Nehmer's view, it is no use for the U.S. to enter into gentlemen's agreements with other countries, unless the U.S. has in the background the power to impose quotas.
This suggests that even more care should be taken to avoid giving to the U.S. anything which they can present as a bilateral or multilateral arrangement, and that any suggestions pointing towards a gentleman's agreement which Stans may make will probably be
advanced only for tactical reasons,
/ But
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