C.

ODLC 1975

SECRET

From: R.J.Andrew, AUS(GS)

Our reference: AUS(GS) 524/75 Your reference:

P.L.O'Keeffe, Esq., CVO

MINISTRY of defencE

Main Building, Whitehall, LONDON S.W.IA 2HB

Telephone:

01-218.6476... (Direct Dialling)

01-218 9000 (Switchboard)

M. O'Keefe or.

Ли Галлий 12

12 December 1975

468

Enter

urkullon

Ide

I have told in Andrew

Hong Kong & Indian Ocean Department that the fea Minister (Sqf

Foreign and Commonwealth Office King Charles Street

SW1A 2AH

asikk har led wt) was briefed on 12 December to speak

Dear hangface,

along the liner

A

w.icke

Har

day.

Mr. Funali

to the Pay

Dim

HONG KONG DEFENCE COSTS AGREEMENT

I have sent you separately a copy of my Minister of State's

(465) latest letter to the Governor of Hong Kong proposing that we

Yes.

Iris uw brains

Makou

in MES

should announce the Defence Costs Agreement on 19 December, provided that there has by then been no statement by HMG on import controls which would place significant new restrictions on imports from Hong Kong. As you know, the Governor has hitherto maintained that we must wait for the uncertainty on import restrictions to be removed before making our announcement; but I understand that when the Executive Council discussed the Agreement on Tuesday of this week they decided to give the Governor full discretion on the timing of an announcement, while emphasising how unfortunate it would be if it were to coincide with an announcement on import restrictions affecting Hong Kong. I hope therefore that he will feel able to accept the Minister's latest proposal in which case we must try

to see that the proviso is fulfilled.

2.

I believe that the question of import controls was on the Cabinet agenda this morning but that in the event discussion was limited to motorcars and a separate Ministerial group (possibly a MISC Committee) is to be set up to consider import controls generally. I do not know when this Ministerial group willmeet; but I am told it might be on Monday. Nor do I know its composition, but I assume that it will include both the FCO and Treasury. I am therefore

thiram. writing to you, with a copy to John Hansford, so that you can ensure

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that your Ministers are briefed to oppose any restrictions on imports from Hong Kong which might prejudice the Defence Costs Agreement. We shall be briefing in the same sense within the Ministry of Defence.

3.

I am also copying this letter to Farrow of the Cabinet Office, who I understand is likely to be Secretary of the new Ministerial group.

SECRET

Your ever.

Red

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