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CONFIDENTIAL

One complication forter

will bz ital until ASAS are

unscrambled (& the proves may

nor to completed ffor 3.0. June 1997)

PRIORITY

Hayter will is working both with its own ASAS

and with our

bilateral AS AS

UK's international obligations in this respect. This may affect-

the drafting of the CAB in relation to paras 1 and 2 of your-

Pelno-631.

which, so far

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standands are cancered,

su exercied

ofter consultation Jorban you DeA тавтра

Hi enviarge

it uncluding

3.

As far as the technical aspects of your proposals are concerned, it is of course already the case that DCA Hong Kong has considerable powers in many areas/In-granting additional powers to you he would obviously wish to ensure that where

wife continue to

thigh such contrillation possible a conformity of standards can be achieved. This is particularly the case with paras-6 and 8 of your Telno 631.

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The speed at which we unscramble ASAS will also affect

the implementation of the CAB. We will need to ensure that, until

separate Hong Kong/third country ASAS have been concluded, your exercise of powers remains subject to the provisions of our bilateral ASAS. Full autonomy/in giving effect to the powers sought in para 8 of your Telnd 631 will have to be a gradual process. It is possible that on 30 June 1997 at least one UK ASA (with the PRC) will remain applicable to Hong Kong.

4

5.

And

pplica

ensuring H.K. has

(in this fuld

reconcile in policy of foodoom

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In order to provide you with a comprehensive statute book

that does not conflict with our international obligations, we wouldd

our carling responsibility to youre it.k's 2 propose to draft a confidential despatch which with deal with both Civil Aviation and Shipping. The despatch will state HMG's

continuing responsibility for the external affairs of Hong Kong, and

H- Kis responsibilities in/regand

Ek will motantly include simil require you to keep us informed of any acts or proposals that may provisions to these in the conlindulial GATT dispatch with additions, requried by have an effect on our international obligations and, in such an -

# partiilan native of the legislation event, to to abide by the decisions of HMG.

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