171
GRS 690
PRIORITY
CYPHER CAT/A
FM HONG KONG 1608157
CONFIDENTIAL
CONFIDENTIAL
RECL
REGISTRY No. D
17 JUN1975
1-KK10/1
TO PRIORITY F C O TELEGRAM NUMBER 592 OF 16 JUNE.
LAST
REF.
MY TELEGRAM NO 570 OF 9 JUNE - DEFENCE COSTS AGREEMENT;
582) TOP
(ng
183
184
IT IS NOT POSSIBLE TO COME TO FIRM CONCLUSIONS ON THE PRECISE PROVISIONS OF THE PROPOSED AGREEMENT UNTIL WE ARE CLEARER ON THE STRUCTURE OF PARAGRAPH 2. OUR COMMENTS BELOW ASSUME THAT HONG KONG WILL NOT BE REQUIRED TO CONTRIBUTE MORE THAN 50% OF THE COST. IF IN THE EVENT THIS IS NOT PROVED TO BE THE CASE THEN WE MAY BE FORCED TO A DIFFERENT FORMULATION TO TAKE ACCOUNT OF THE POINT MADE IN MY TELEGRAM NO 544 OF 31
MAY.
2. SUBJECT TO THESE RESERVATIONS OUR PRELIMINARY COMMENTS ON 175) THE DRAFT TEXT FORWARDED IN YOUR TELEGRAM NO 454 OF THE 6 JUNE
ARE AS FOLLOWS:
PARA 1
(76)
PARA 2(A)
WE PREFER THE FORMULA IN PARA 1 OF YOUR TELEGRAM
NO 455.
IN THE NEW AGREEMENT, UNLIKE THE CURRENT ONE, HONG KONG'S CONTRIBUTION IS TO BE CALCULATED BY REFERENCE TO THE SIZE, COMPOSITION AND COST AT SEPTEMBER 1974. ? PRICES OF THE NEW AGREED GARRISON. WE THINK THESE SHOULD BE RECORDED IN AN ANNEX TO THE AGREEMENT. (B) PRESUMABLY THE AGREEMENT WILL SPECIFY WHAT HONG KONG'S
CONTRIBUTION WILL BE AT SEPTEMBER 1974 PRICES EXPRESSED IN TERMS EITHER OF MONEY OR OF A PROPORTION OF THE
TOTAL COST?
(C)
WE WILL REPLY SEPARATELY ABOUT CURRENCY.
PARA 3 (A) PLEASE SAY IN MORE DETAIL HOW YOU SEE YOUR FORMULA
APPLYING IN PRACTICE. WE FIND THE DRAFT DIFFICULT TO CONSTRUE. THE FIRST AND SECOND SENTENCES APPEAR TO BE
INCONSISTENT.
CONFIDENTIAL
/(B).