SUPAAL

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J. DEFENCE COSTS AGREEMENT

Negotiations taking place between British and Hong Kong

Governments about arrangements to apply after expiry of the current

Defence Costs Agreement on 31 March 1988.

Both sides naturally keen to bring negotiations to early and mutually satisfactory conclusion.

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Negotiations primarily the responsibility for my rt hon Friend the Secretary of State for Defence. Honourable Members will appreciate that it would be inappropriate for me to comment on

substance of negotiations.

Fourth round of negotiatons concluded on 29 February. Both

sides' negotiators have reported outcome to their respective

authorities.

No question of a walk out by British side: both sides tabled proposals aimed at reconciling outstanding issues.

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No arrangements have yet been made to hold further negotiating

round.

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