TNAG-1401-FCO40-1873-Future-of-Hong-Kong-continued-participation-in-the-General-A-1985 — Page 100

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LL ON MR WILLIAMS BY SIR EDWARD YOUDE, GOVERNOR OF HONG KONG ON 23 APRIL 1985

Initial discussion concerned the worrying protectionist trend in the USA and its implications for steel and the MFA. On the latter Mr Williams indicated in confidence UK views on a link with the GATT Round, adding that HMG's policy was likely to be made known in general terms in a Debate to be held shortly.

2 In respect of the GATT Round Sir Edward said that trade concessions could hardly be sought from Hong Kong because their market was already open.

Mr Williams advised him on the likely line-up of Member States in respect of the GATT Round, adding that Portuguese accession would strengthen the protectionists. The date of the launching of the GATT Round remained uncertain and was not a point which the EC felt had to be settled immediately.

3 Sir Edward referred to the proposed visit of the House of Commons Select Committee to Hong Kong and asked what views they were likely to have. In responding, Mr Williams stressed that UK exports to Hong Kong were certainly too low, and went on to say how worried UK industry in general was about future Chinese competition. Sir Edward said Hong Kong were reasonably happy with that, recognising they would have to compete on efficiency and speed of delivery.

4

Mr Williams referred to the issue of Hong Kong entry into the GATT, in response to which Sir Edward said that his government had a paper on the subject approaching completion. Mr Williams thought that there might be EC opposition because of fear that once Hong Kong came in it would be impossible to keep China out. US help would certainly be important for Hong Kong, but the question of a linkage between Hong Kong and Chinese entry posed dangers and would require very careful thought.

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W J HALL ITP3

30 April 1985

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Mr Williams

Mr Lane

Mr Hall OT2/3 Mr Pryor

Miss Willcocks

Mr Galsworthy - FCO

Mr Hum

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