DRAFT
COONMITENTIALNTIAL
DRAFT LETTER FROM CDS TO CBFHK
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HONG KONG DEFENCE COSTS AGREEMENT
I was grateful for your letter of 5 May in which you reported
generally on the first year of the DCA and enclosed copies of your
correspondence on this subject with HE The Governor. Evidently
ratters are settling doim well and it was particularly reassuring
that we are not to be faced, at least for a year or so, with the
formal review of the support elements which the Hong Kong Government
now has the right to request.
2. The contents of your letters have been brought to the attention
of those concerned in the MOD, who have been invited to set in hand
any follow-up action that may be required. I will however comment
briefly on one or two particular points:
a.
Review of teeth-arm components.
There was some surprise here at the Governor's suggestion,
reported in para of your letter, that such a review might be
desirable in early 1978. In the final stage of negotiation of
the
the DCA, Hong Kong Government, as you may know, sought to include
in the MOU a clause giving them the right or review of all aspects
of the garrison. This was unacceptable to MOD as far as the
teeth-arm element was concerned, as the force level had been
the subject of exhaustive study both locally and in Whitehall,
for and was a matter which the Chiefs of Staff bore ultimate
responsibility.
While I do not suggest that IE The Governor
is in fact seeking to gain administratively a point not conceded
at the negotiating, table, it is nonetheless difficult to
envisage the purpose of such a review unless the security
/ situation