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agreement to Hong Kong concluding a voluntary restraint agreement.
7. There were then discussions in London in Junc at which he had said (although it was not recorded in the note of the meeting) that he would go to Stockholm and that ho under- stood he was free to conccde new restraints on polyester/ cotton shirts. Ile had added that this meant that the existing policy was reconfirmed. This statement was not questioned.
8.
When an importing country asked for consultations the Hong Kong Government took the view that they had got to consult in accordance with Article XXII of the G.A.T.T. When an Article XIX type case was established they werc prepared to consider restraints. In the casc of the Canadian negotiations he had had no instructions. The Governor's telegram of the 7 Junc had not been answered and he took it (in view of his remark recorded in para. 7 above) that the existing policy had been reconfirmed. There was no doubt that the Canadians were very concerned about shirts and he had worked out a proposal which he had told the Canadians hc vould put to the Governor.
9. In the light of this history the Hong Kong authoritics were amazed at the telegrams within the last two weeks about the resumed negotiations with the Canadians. The Governor had taken a personal interest in these exchanges.
He was exccedingly disturbed about the situation. Hong Kong had been negotiating on commercial matters for ycars. The practice had been that the Governor was responsible for looking after Hong Kong interests and was not obliged to refer to London. Trade was vital to Hong Kong and, provided that proposals were within the accepted agreed policy, decisions were taken by the Governor in the light of Hong Kong's intercst. People in Hong Kong would regard the situation as intolerable if control were to be exercised
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