J
SECRET F
ET
DRAFT LETTER FROM PS/SECRETARY OF STATE TO PS/CHANCELLOR OF THE
EXCHEQUER
HONG KONG DEFENCE COSTS AGREEMENT
J
You will be aware that the Minister of State for Defence
has concluded a new Defence Costs Agreement with the Governor
of Hong Kong which is extremely advantageous to the United
Kingdom but that an announcement of this agreement has been
delayed, at the express wish of the Governor of Hong Kong,
until he is satisfied that Hong Kong will not be affected
by tomorrow's statement on import restrictions.
As you
also know it is vitally important that the new agreement
should be announced as soon as possible if we are to benefit
from the terms negotiated, since these tie the increased
contributions from the Hong Kong Government to the early
release of Service land in the colony by the United Kingdom
and this process must start on 1 January 1976.
At MES yesterday Ministers agreed that no action would
be taken against imports from Hong Kong for the time being
although this question might have to be reconsidered at a
later date. Mr Rodgers has conveyed this decision to the
Governor of Hong Kong and, in the light of it, the Governor
has agreed to announcing the new Defence Costs Agreement at
11 am on Friday 19 December, provided nothing is said in
tomorrow's debate on employment and measures for saving
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SEORET
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