TNAG-0171-FCO40-207-Effect-of-UK-s-economic-measures-on-exports-from-Hong-Kong-1969 — Page 22

4.

On the other hand we see clear

advantages in applying these measures

without discrimination in favour of one or

against the other exporting country.

We are already in an exposed position

over our obligations under GATT, and no

doubt other trade treaties. If we apply

the measures with discrimination betwcon

differe countries, we shall be yet more

exposed, although it is arguable that if

we refuse to permit overseas financing

of the deposits, we turn what we are able

to call at present a transitional measure

of monetary restriction into a much more

obvious interference with the volume and

pattern of international trade.

5.

fi

10

It would be easier to advise what

immediate action, if any, we should take

if we could say at this stage what was

the main purpose of these measures, but

it seems to me too early to decide. At

least as long as the Treasury does not

prevent overseas financing of deposits,

the position of course is satisfactory,

might

and It/therefore be inopportune to raise

the question now. But what we must, I

This

suggest, ensure is that the policy is

not changed without our being given the

opportunity to deploy the very strong

arguments to which I briefly refer above for mitigating the effect of there measures

in favour of Hong Kong.

on

NOTHING TO BE WRITTEN IN THIS MARGIN

We may be confident- That Hong Konef will manage to mamlan her export Frade to this country

Copy to:

T. G. O'Brien

licy

(Financial Policy and

Aid Department)

Mr. Moreton.