TNAG-0337-FCO40-373-Visit-of-the-Chancellor-of-the-Duchy-of-Lancaster--Sir-Geoff-1972 — Page 14

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6.

On sterling there was some discussion of the stens that led up to the British float. Mr Rippon emphasised that the sudden movement of vast capital sums, and the disequilibrium caused by this to the world monetary system and individual currencies, pointed to the urgent need for a reform of world monetary practices. The Community was already playing an important role in this field. Steps in the direction of monetary union did not immediately affect the present Sterling Agreement with Hong Kong, nor had such Agreements featured in the negotiations for accession. There were no immediato alterations necessary in the Agreement because of enlargement.

7. In further discussion several of those present pointed out that, despite their apparent advantages in Hong Hong British oriented business and administrative practices the commercial performance of the UK in the Colony had been most disappointing recently. British businessmen appeared not to recognise the importance of Hong Kong as a market and shop-wind ow for East Asia. Despite its relatively small population, its potential as a buyer of Western goods was great. Mr Rippon took this point but wondered whether the advantages claimed for British business in Hong Kong had in fact as great an influence as was made out.

But

8. Great emphasis was laid on the need to avoid discrimination against Hong Kong and in favour of such low-cost suppliers as Taiwan, South Korea and Singapore. Hong Kong could live with restrictions and a certain degree of tariff protection. quotas and other protectionist devices which discriminated against her were particularly dangerous. Mr Rippon emphasised that it was Britain's intention, on accession to the Community further to develop the Community's liberal trading policy, although attention must also be paid to domestic pressures within the UK.

British High Commission

Singapore

16 September 1972

Distribution:

Nr Alexander

Mr Logan

Mr Robin: on

FCO

Mr Wilford

Mr Butler, EID/1

Mr Laird, нK&IOD Mr Leatry, News

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Mr Christofan (Cab. orr)

Mr Fakenham (Cab. off)

Mr Bell (Toy)

Hr Denman (UTI)

UKDEL EC Brussels

Political Adviser, Hong Kong Senior British Trade

Commissioner, Hong Kong