GRS 500
PRIORITY
CYPHER CAT/A
FM HONG KONG 140935Z
CONFIDENTIAL
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CONFIDENTIAL
14 JUL1975
jokk 101
TO PRIORITY F C O TELEGRAM NUMBER 686 OF 14 JULY
FOR O'KEEFFE FROM GOVERNOR.
YOUR TELEGRAM NO 540: DEFENCE COSTS AGREEMENT.
.NEXY REF.
2091 (213
THIS TELEGRAM IS A FOLLOW-UP TO OUR AGREEMENT BY TELEPHONE
FOR OFFICIALS TO MEET IN LONDON ON THURSDAY,
2. YOUR PARA 2: THIS PUTS THE DILEMMA TOO STARKLY. OBVIOUSLY
THE HEAVIER HONG KONG'S BURDEN THE MORE WE WILL HAVE TO SATISFY
UNOFFICIALS AS TO THE JUSTIFICATION FOR THE COMPONENT PARTS WHICH MAKE IT UP, WITH THE PRESENT COMPARATIVELY LOW LEVEL OF HONG KONG CONTRIBUTION, PROVISION FOR REVIEW OF DETAILS OF EXPENDITURE AT THE REQUEST OF THE HONG KONG GOVERNMENT WOULD BE
INAPPROPRIATE, BUT A STAGE COULD BE REACHED AT WHICH THE OPPOSITE WOULD BE TRUE. IN THE LATTER CASE, IT WOULD BE NECESSARY TO INCLUDE AN APPROPRIATE CLAUSE, BUT I DO NOT THINK THIS NEED AFFECT THE DRAFTING OF THE REST OF THE AGREEMENT.
3. I TAKE IT THAT THE OBJECT OF THE MEETINGS ON THURSDAY AND FRIDAY IS TO AGREE THE TEXT OF AN AGREEMENT (MINUS COST- SHARING AND FORCE LEVELS) INSOFAR AS OFFICIALS ARE ABLE TO DO SO, AND WHERE THEY ARE UNABLE AT LEAST TO SET OUT RIVAL TEXTS WHICH ALTHOUGH NOT AGREED ARE MUTUALLY UNDERSTOOD.
4. YOU MIGHT LIKE TO HAVE THE FOLLOWING PREVIEW OF OUR COMMENTS
ON TWO POINTS:
(A) YOUR PARA 4: THE THREE ELEMENTS INCLUDED IN PARA 2 OF THE
CURRENT AGREEMENT HAVE WORKED WELL AND WERE ACCEPTED BY UNOFFICIALS, INDEED THE CAPITAL WORKS ELEMENT IS AN IMPORTANT ONE FOR HONG KONG AND HELPED TO CARRY THE DAY WITH UNOFFICIALS PREVIOUSLY. ANY CHANGE IN THE NEXT AGREE- MENT WOULD GIVE RISE TO SUSPICION AND WILL THEREFORE MAKE
CONFIDENTIAL
/ACCEPTANCE