CONFIDENTIAL

033617

MDLIAN 3597

CONFIDENTIAL

FM WASHINGTON

TO PRIORITY FCO

TELNO 2188

OF 161854Z AUGUST 89

INFO PRIORITY CANBERRA, HONG KONG

INFO ROUTINE TOKYO, SEOUL, ASEAN POSTS, PEKING, WELLINGTON

OUR TELNO 2146: ASIA PACIFIC ECONOMIC FORUM

GILLMORE RAISED THIS DURING HIS DISCUSSION WITH SOLOMON (ASSISTANT SECRETARY FOR EAST ASIA, STATE) HERE ON 15 AUGUST.

1.

2.

GILLMORE SET OUT THE POLITICAL AND ECONOMIC CASE FOR INCLUDING HONG KONG IN THE NOVEMBER MINISTERIAL MEETING. SOLOMON SAID THAT THE ECONOMIC SIDE OF THE STATE DEPARTMENT WANTED TO

CREATE A NEW ORGANISATION. IN THAT CASE IT WOULD EITHER HAVE TO

INCLUDE CHINA, HONG KONG AND TAIWAN, OR EXCLUDE THEM ALL. POLITICALLY IT WOULD BE VERY DIFFICULT FOR THE US TO SETTLE FOR ANYTHING INBETWEEN.

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3. SOLOMON THEN REVERTED TO HIS IDEA (OUR TUR) OF USING THE PECC

STRUCTURE. THAT WOULD SOLVE THE MEMBERSHIP PROBLEM. GILLMORE SAID THAT THE HAWKE PROPOSAL WAS FOR A RATHER DIFFERENT ORGANISATION TO PECC. WE DID NOT SEE THEM AS INTERCHANGEABLE.

SOLOMON COMMENTED THAT IT WOULD BE USEFUL IN SUBSTANTIVE TERMS TO HAVE BUSINESSMEN AND ACADEMICS INVOLVED THROUGH PECC, SINCE THEY HAD VALUABLE INPUTS TO MAKE. IT WOULD BE POSSIBLE TO GRAFT ON TO PECC A

SECRETARIAT WHICH COULD MAKE THE ARRANGEMENTS FOR MEETINGS AS REQUIRED.

4.

SOLOMON ADDED THAT HIS IMPRESSION WAS THAT HAWKE WAS MORE

INTERESTED IN HAVING A SUCCESSFUL NOVEMBER MINISTERIAL MEETING IN CANBERRA THAN IN PRECISELY WHAT THE LINE UP OF PARTICIPANTS WOULD BE.

HE SUGGESTED THAT WE SHOULD ENCOURAGE THE AUSTRALIANS TO THINK IN TERMS OF PECC WHICH WOULD THEN EN BLE HONG KONG TO PARTICIPATE WITHOUT PROBLEMS.

5. SOLOMON ADDED THAT IF A PECC-BASED APPROACH WOULD NOT WORK, IT WOULD MAKE IT EASIER FOR THE US IF WE COULD PREARRANGE WITH

THE CHINESE THAT THEY WOULD NOT OBJECT TO THE INCLUSION OF HONG KONG IN THE APEF. EVEN THEN, THERE WOULD BE PRESSURES ON THE HILL TO INCLUDE TAIWAN. SOLOMON'S STRONG PREFERENCE REMAINED TO

EXPLORE THE PECC ROUTE.

6.

SUBSEQUENTLY, THE AUSTRALIAN EMBASSY TELEPHONED TO COMPARE NOTES WITH US. THEY TOLD US THAT THE EAST ASIA BUREAU IN STATE WERE ALSO TOYING WITH THE IDEA OF PROPOSING THAT THE

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CONFIDENTIAL

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