TNAG-0243-FCO40-279-Conduct-of-Hong-Kong-commercial-relations-1973 — Page 95

CONFIDENTIAL

United Kingdom Relations with Hong Kong

For some years now it has been clear that the interests of

Hong Kong as a major exporter, exxexixxxxxxportxxbxexixngx. xixnxxtxexxixixxexs

jbothx.xxxxtxbox xandxxxxxxxxxtxbox, are not the same as those of the

United Kingdom, who, although herself a substantial exporter,

is primarily a major importer and domestic producer, xxxxxxxxixixx

xxfxxtxexxtxixbes. This is especially the case in the field of textiles.

2. It is the general policy of both Hong Kong and the United

Kingdom to support measures designed to liberalise international

trade. Difficulties have arisen, however, over the form of the

approach to particular issues. It is a fundamental part of our

policy to support the principles enshrined in the General Agreement

on Tariffs and Trade (GATT) and to resist restraints on trade

which we regard as unjustifiable. Hong Kong, on the other hand,

is

being much more dependent on exports than the United Kingdom and

with much less bargaining power in negotiations with other countries,

understandably tends to take a less firm view. In general, Hong

Kong would prefer to negotiate under duress and to make the best

deal possible rather than run the risk of having unilateral

restrictions imposed on her exports by her trading partners.

This attitude can be explained in part by the fact that Hong Kong

attaches great importance to her free port status and is reluctant

to take to herself the right to retaliate against the goods of a

country which is discriminating against the Colony.

So far as cotton textiles are concerned

3. A Our relations with Hong Kong in this field xxxxxxxxxxxxxxtxixixes

have evolved gradually over the years and cottons as such now

present no problems. With the development of man-made fibres,

however, new difficulties have come up, particularly in the field

of Hong Kong's external commercial relations. These have arisen

CONFIDENTIAL