TNAG-0242-FCO40-278-Conduct-of-Hong-Kong-commercial-relations-1970 — Page 19

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Mr. Wilford

Sir L. Monson

CONFIDENTIAL

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The two attached draft telegrams have been cleared with the

Board of Trade and MINTECH. TPD and FED have been consulted and Commodities Department have also taken the precaution of consulting their own legal adviser.

2. I have only two comments

(a) Mr. Gallagher wondered whether we might not find ourselves in a slightly awkward position if Ministers saw difficulty in the proposals after the Governor had agreed they were worth pursuing. The telegram is, however, couched in exploratory terms and I do not myself think that we need

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(b) We must reserve our ability, in the last resort, to veto

any proposed transaction by the Hong Kong Government within the terms of the delegation of authority. This point has

not been spelt out in the draft because we want a favourable initial response from Hong Kong. It will, however, have to be mentioned at a later stage.

3. Mr. Heath is now submitting the drafts to Mr. Gallagher and I agreed with him that I would submit them simultaneously to you.

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