TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 14

CONFIDENTIAL

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5. It would be hard for us to press in the Community

1

for better treatment to be granted to Hong Kong, whose

case commands little sympathy there. The inevitable

answer to hard pressure would be that the UK should

provide for Hong Kong by increasing the UK's global

ceiling to take extra imports. This of course would not

be acceptable to us.

6.

Nevertheless, we have a duty to protect the interests

of Hong Kong, in view of its dependent status, and, at least

to try for reasonable treatment for Hong Kong. Moreover,

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we must also try to dispel any belief in the Colony that

Britain alone is responsible for what is happening.

therefore recommend that Sir D Maitland should have a word

with Commissioner Davignon, warning that it would be a

mistake to push Hong Kong too hard. In spite of the real

risks for Hong Kong if it refused to conclude an agreement

with the Community, in a situation which Hong Kong judged

desperate, it might be prepared to take that risk. This

would probably cause other suppliers to refuse to conclude,

lead to the breakdown of the Community's approach and to imposition of unilateral measures with all the implications

that would have for world trade, particularly for the GATT MTNs. 7. I also recommend that we should, as he has requested,

give the Governor of Hong Kong discretion to return for

consultations on this subject, if he should so wish. He will

have to explain the situation to Hong Kong industry. It

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CONFIDENTIAL

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