CONFIDENTIAL
nover have been entered ind but for the Swedish pre-election difficulties, which have now disappeared. I find it difficult to Bee how we can continue to take that line after the recent round of negotiations. It seems to me that, even though this political factor is no longer operative, Hong Kong will have to consider whether the Swedee have a case for renewal on straight commercial grounds just as we had to consult 1th the Canadiens on the renewal of the restraint agreement with them although it was originally intended to be for one year only.
8. You may think that we ought to discuss these matters at a meeting. I would like to see them disposed of as soon as possible so that we are able to consider the formal Swedish request without delay when it is presented.
9. In the meantime we must reply to telegram No.177. Ideally we should do so with the answers to the above matters decided but if you think we cannot do this in time and will let me have a draft interim reply that would do. We have already accepted Hong Kong's suggestion in paragraph 7 of that telegram as to the reply that should be returned to De Geer's letter of 7 February.
(K. S. Carter)
CONFIDENTIAL