CONFIDENTIAL
13.
If this department had been asked at the beginning of this year to set out briefly the arrangements which had governed the conduct of Hong Kong's commercial relations in the past, it would be along the following lines. Responsibility for the conduct of Hong Kong's external commercial relations rests constitutionally with H.M.G. Without any formal devolution of responsibility Hong Kong has been left to conduct negotiations and exchanges with third countries in matters primarily concerned with only the Colony's interests, keeping H.M.G. informed of the progress and outcome. In matters involv- ing H.M.G.'s interests the necessary action has been taken either by H.M.G. or the Colony or both acting in conjunction, as might be appropriate, after full consultation and agreement on the course to be pursued. It would appear that until recently no issue had arisen involving a conflict of interests that could not be reconciled and that these arrangements have functioned quite satisfactorily.
14.
An area of major conflict of interest did begin to emerge in early 1967 when the Canadians first sought voluntary restraints from Hong Kong. The Industries Division of the Board of Trade sought to prevent Hong Kong giving this and subsequent undertakings to Norway and Sweden in 1968, urging that Hong Kong should force these countries to make out a case for quantitative restrictions under Article XIX of the GATT and
to proceed in accordance with that Article. The C.R.E. Division
of the Board of Trade was on the other hand reluctant to see
Article XIX invoked: it agreed with Hong Kong that such action could be most inimical to the Colony's interests and that there was little hope that it could be satisfactorily challenged by us on Hong Kong's behalf. The C.R.E. Division's view prevailed and Hong Kong gave the necessary undertakings to those countries after negotiations in which representatives of H.M.G. played a part.
CONFIDENTIAL
/15.
No comments yet.
Private notes are available after approval.