4.
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Mr Lange said that he would be seeing the Governor in Hong Kong and had been reading with interest the press reports of the latest round of negotiations with the Chinese. Sir Geoffrey Howe
said that no concessions had been made, but in recognition of the
fact that 92% of the territory would in any case revert to China
in 1997, we were not making difficulties over the issue of
sovereignty. Parliamentary consent would of course be required
for any agreement negotiated. No suggestion had been made that the leases should be surrendered before 1997 if agreement was
reached earlier.
5. Mr Lange said that concern in New Zealand about the interna-
tional financial situation was not the exclusive property of Sir Robert Muldoon. The Labour Party was enormously influenced by the Brandt Report. Sir Geoffrey Howe said that there was no real difference between us as regards objectives although he disagreed with the Brandt analysis at some points. He was anxious to
promote a workmanlike approach to the problems. The Commonwealth Study Group Report Towards a New Bretton Woods'' provided a useful basis. Mr Lange agreed. Sir Geoffrey Howe also mentioned that the UK had decided to contribute to a supplementary fund to bring IDA VII up closer to the levels expected by developing
countries.
6. Sir Geoffrey Howe also raised the question of the security of small states, which had been discussed at CHOGM at British
initiative. Grenada had illustrated the problem. There were other potential targets, eg in the Pacific. Mr Lange said that the New Zealand Opposition approved the position the Government had taken in its recent defence review to establish a rapid deployment force for use in the Pacific. He recognised that it was important to keep small islands out of the hands of brigands but noted the difficulty of identifying a threat when it came to justifying the defence vote. After the turmoil of the New
Hebrides independence the same difficulty had brought down the Papua New Guinea proposal for a Pacific peace-keeping force.
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