Mr. Heath
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United Kingdom Relations with Hong Kong on Textiles
We spoke on the telephone about this and I enclose a draft of the despatch delegating authority to Hong Kong.
2. As you will see, this is based on the terms of the amended draft submission but excluding Mintech's specific references to the Governor's proposal to reopen the dialogue between Hong Kong and the USA.
3. We clearly cannot submit the despatch to Ministers until after the Four-Power talks. I am hoping, however, that Mintech will feel able to accept the strong wording in the second sentence of paragraph 7 of the attached drasti in place of the qualifying phrases suggested earlier by Mr. Gregory. Apart from this there are only two amendments to the submission proposed by Mintech which I personally have difficulty in accepting.
(a) The proposed amendment of paragraph 10.
I think this will have to be looked at again when we know the outcome of the Four-Power talks.
(b) The proposed amendment of paragraph 13.
4.
Just as we
I do not think we can go as far as this. cannot get away from the constitutional position so I consider we cannot act in respect of Hong Kong only in accordance with our normal liberal trading policies and as if our relations with Hong Kong were governed only by the GATT. I can see no alternative to returning to the original form of words and I have done this in the draft despatch.
The arrangements described in paragraph 4 of the draft are based on our saving despatch No. 369 which I unearthed recently. A copy is attached.
5.
If you agree, I suggest that the draft despatch might now be sent to the Board of Trade and Mintech so that the submission can be put forward without delay once the Four-Power talks have been held. I am assuming that unless something extraordinary happens at Geneva it will be agreed that Hong Kong should be allowed to enter into negotiations with the Americans after the Four-Power talks. Incidentally, I think it would be a nice gesture if we were to send the despatch to the Governor in draft for his comments. This may well prolong the matter but should nevertheless pay dividends. I doubt if the Governor will be able to produce any significant amend- ments which could be accepted here.
29 July, 1970
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(3. 0. Laira) Hong Kong Department
CONFIDENTIAL
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