SECRET

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Defence Costs Agreement

8.

Understand that discussions so far have been tough and that

MOD are asking you to double at least cost of garrison.

Glad you

will be taking part in the next round of talks in August. Can

FCO help at this stage? Mr Pym may ask for Lord Carrington's

views.

Green Paper on District Administration

9.

Grateful for the way in which you responded to our talk in

January.

What has been the reaction in Hong Kong so far?

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