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which we know you have in the past

adopted the second course,

favoured, there might well be pressure in Parliament to make the

Order in Council subject to either an affirmative or negative

Parliamentary procedure, and thus to give Parliament another bite

at the cherry As you know, the advice of the Attorney-General

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is that the Order in Council must not/not be so subject: if this

were to happen we would be unable to ratify the agreement. The

view here is that

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we

cannot afford to take this risk, which would

no doubt land us in very real difficulties with the Chinese.

We think that you may wish to touch base with EXCO on this

point. Earlier this year when the problem of the date of

ratification was discussed with the Unofficials in London, they

were told of our preference at that stage for legislation

providing for the termination of sovereignty by subsequent Order

in Council, though no commitments were given on this point. We

hope that you will be able to explain to them the major

difficulties which, after further consideration of Parliamentary

handling, we now see in such a course. The major attraction for

them in using the Order in Council procedure was that it would

theoretically be open to a future government to withhold the

Order if they thought that the Chinese were not keeping to the

agreement. In fact there is not much difference between this and

the position if the Bill terminates sovereignty with effect from

1997. Termination in the Act would not be irrevocable in that it

would still be open to the Government to seek the repeal of the

Act in Parliament before the termination of sovereignty took

effect. It has to be recognised, of course, that either this

course, or the course of refusing to make an Order in Council would be an extremely drastic step. Either could be

contemplated only if there had been a a total breakdown in the

implementation of the agreement. And the practical significance

of such a step would be highly doubtful, given the inevitability

of the reversion of the New Territories in 1997.

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