TNAG-0245-FCO40-281-Exports-of-textiles-from-Hong-Kong-to-Sweden-1970 — Page 121

Mr. Wilford

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Commercial Relations with Hong Kong

I must answer your charge that I am being "remarkably complacent about the future" in this matter.

2.

The Governor rightly pointed out in his telegram No. 268 that it was most disappointing that, after more than two years, we still had no mutually agreed policy on how Hong Kong should deal with "these problems". I agree with him, but it is not my fault that we are now in difficulties. Nor, with respect, am I in any way complacent about the problem. Most of my time in recent weeks has been spent on commercial work.

3. When I arrived at the department I was told about the document under preparation dealing with Hong Kong's

解。

external commercial relations. A copy of the latest version is attached. This has not yet been accepted by Mintech. Indeed, Mr. McEnery is drafting changes giving Hong Kong more freedom and these will go to Mr. Gregory, who is a much more reasonable person than Mr. Stewart, from whom he has taken over. The redraft is to be circulated to departments towards the end of this week or early next.

4.

I welcome this development because, when I first read the attached document, I was not convinced that we could impose a policy on Hong Kong flatly against their wishes, whether the matter were put to Ministers or not. I am still of that view. Nevertheless, since I have been in the department we have been trying to work to the proposals as they stand. These are based on mutual co-operation and understanding and I must, with respect, repeat that, in my view, Hong Kong should have given us a chance to comment before fixing a date for the talks with the Swedes and before making up their minds on the tactics they would adopt. As I read the concordat where considerations of British international commercial policy are involved it is up to Hong Kong to tell us in good time what they have in mind about bilateral consultations; in my view they should not wait for prompting from us (which, in their present mood, they would probably_resent anyhow). Mr. Dunnett did, in fact, write to Mr. Sellers early in March expressing our interest in the consultations with Sweden.

5.

We cannot consider our position for the next round with the Swedes until we have the views of Hong Kong on how we should proceed. The Hong Kong brief will not be here until towards the end of this week. A possible outcome of the talks is that the Swedes may give up me or two of their requests for restraints on non-cotton items in return for Hong Kong's acceptance of requests on other items. The Board of Trade view is that we need not ask for a representative of the UK to attend the consultations on this occasion. They think, however - and I agree

that it would probably be helpful to the Hong Kong delegation to have somebody from our Embassy sitting in on the talks.

/6..