3.
The way should now be clear for the Agreement to be announced "on or about 8 December 1975" as previously
planned. It so happens that we have a Parliamentary
Question on Hong Kong down for answer on Tuesday next 9 December. I am also due to appear that day before the
Defence and External Affairs Sub-Committee of the
Expenditure Committee which has recently returned from
Hong Kong.
This makes it convenient to announce the Agreement on Tuesday in the form of a written Answer supplemented by a rather fuller Pross statement (a copy of which could be placed in the Library) and at about the same time, to give the details to the DEASC. This timetable would be acceptable to the Governor in that it would just enable him to inform his Executive Council at a meeting on Tuesday morning before the announcement is made in both London and Hong Kong.
I am led to believe
4. There is however a difficulty. that there is great concern in Hong Kong about the possibility of UK import restrictions and the Governor represented most strongly to me this morning that if the announcement of the Defence Costs Agreement which is
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In
bound to be unpopular in Hong Kong - were to be followed within a few days by an announcement of import restrictions, he and his officials would be placed in an extremely awkward position vis-a-vis the Unofficials. The outcome could be
seriously damaging to our relations with Hong Kong. these circumstances the Governor would prefer to postpone the announcement of the Defence Costs Agreement until after any statement on import controls. I am bound to say that I share the Governor's view that an early announcement of such controls would prejudice the acceptance of the Defence Costs Agreement, which is very favourable from the UK point of view and will provide much-needed relief for the defence budget.
SEGRET
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