CODE 18-77

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(c) Since LCD will be the lead department in the negotiations I should be grateful for their view on the first steps eg whether we should prepare a draft for Chinese consideration or whether a preliminary meeting between experts would be necessary first.

HUD 371/1

(d) I note from Mr Wood's minute of 12 January to Mr Fletcher-Cooke that, subject to any further views from Hong Kong, Hong Kong Department do not see any particular need to flag the Hong Kong angle at this stage. If the question of the relevance of any potential agreement to Hong Kong arises when Miss Bailes speaks to the Chinese, HKD have suggested that the line we use should be that in paragraph 2 of Mr Fifoot's minute of 10 December to Mr Wood.

6. I should be grateful for the comments of addressees on this course of action and for a suitable form of words where acquired for inclusion is the speaking note for use in Peking.

7. Finally, there have been a number of upheavals in FED staffing recently. But we responsibilities have been re-allocated, Claire Smith will be leading on this subject.

18 March 1988

Shape

Pamela Major (Ms)

Far Eastern Department K268 270 2953

S21AAR

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