774
Sir L. Monson
CONFIDENTIAL
sabi
16
Hong Kong
Mr. Heath informs me that after a talk with
Sir John Cowperthwaite this morning about non-cotton textiles, he (Mr. Heath) and officials from Mintech who had been there,
agreed that it looked as if the only way out of a never-
ending row with Hong Kong on these matters would be for us
to disclaim responsibility for Hong Kong's commercial policy altogether. The Government of Hong Kong could then reach such arrangements as they wished with the United States
and other Governments, and we would not find ourselves
prejudiced in pursuing our own commercial policies by the
fact that we would be regarded as having sold our own pass
by authorising Hong Kong to reach such agreements.
2.
This is not of course an entirely new idea, but I cannot
recall having seen any thorough investigation of it. I have
asked Mr. Heath to get in touch with Mr. Laird, both in
order to find out what if any previous work has been done
on this point, and in any case to initiate a study of it.
3. Undoubtedly the idea has its attractions. I think it
would also involve very considerable difficulties for
Hong Kong. In particular:
(2)
(1) If we disclaim responsibility, I do not see how we
could continue to fight Hong Kong's battles, e.g. in the context of the proposed generalised preferences
on the other hand, we may not win that battle any way.
There would be very strong pressure to treat Hong Kong
no more favourably in the British market than we would
a low-cost producer for whom we had no specific
responsibility particularly insofar as bilateral
arrangements between Hong Kong and other countries
led to a diversion of Hong Kong production to Britain:
on the other hand, I suppose that Hong Kong might say both that they see little sign of specially favourable
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CONFIDENTIAL
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