TNAG-0243-FCO40-279-Conduct-of-Hong-Kong-commercial-relations-1973 — Page 15

Mr. Laird

Reference........

76

Conduct of Commercial Relations

Comments have now been received from Dunnett in

the Board of Trade and Gregory in Mintech on the revised draft Despatch forwarded with our letter of 8 September at (86) to Dunnett.

2.

Dunnett makes the point that, although we appear to be giving authority to the Governor to negotiate with other countries, in effect we wish to be asked for permission to do so before negotiations take place. This point has been covered in paragraph 9 of the draft Despatch by the wording " ....I shall require the Government of Hong Kong to keep Her Majesty's Government

informed about prospective and current negotiations on commodities matters with Commonwealth and foreign countries" and goes on to reserve Her Majesty's Government's rights in respect of the action the Government of Hong Kong may propose to take. This stipulation that the Governor should inform us before negotiations commence would, I submit, make it unnecessary to inform the Governor privately that, although he was being given a delegation of authority to negotiate with other countries, in effect he would have to obtain Her Majesty's Government's permission in each case before doing so. The additional wording suggested by Dunnett in paragraph 7(a) of his minute is already included in paragraph 4 of the draft Despatch. Dunnett's suggestion, that the last four lines of paragraph 10 of the Despatch should be omitted and substituted by "and that other interested parties be informed similarly", means that we would be required to inform all countries with which Hong Kong has restraint agreements, of the delegation of authority; whereas the original intention was that we would only inform other countries of this when it is considered necessary to disassociate the U.K. from the policy of the Hong Kong Government. It would seem preferable to retain the original wording.

3. Gregory of Mintech makes the point that Hong Kong should not be permitted to enter into discussions with the U.S.A. over restraint agreement on non-cotton textiles without our agreement. In this instance it would, I recommend, be advisable to remind the Governor, when sending him the Despatch, that he should not offer to commence negotiations with the Americans on non- cotton textiles without our prior agreement.

4. Dunnett is concerned that the proposed change should be made without publicity and Gregory expreSSES the view that it should be impressed on the Governor separately that the delegation of authority does not permit him to enter into immediate negotiations with the Americane on non cotton textiles. Iwould probably speed.

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