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on the future of the Gurkhas took account of Hong Kong's
needs and have not proved controversial there.
Under the 1988-1997 Defence Costs Agreement (DCA)
HKG pays 65% of the garrison costs: HMG pays 35%. Much
acrimony surrounded the negotiation of the DCA. Exco and
the LegCo feel that Hong Kong is paying too high a
proportion of the costs. Mr Martin Lee's party are calling publicly for HMG to pay more. ExCo are not aware
of the MOD/HKG dispute over the three RN patrol craft, which the Prime Minister recently ruled should stay in
Hong Kong until after 1997.
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If questioned, the Prime Minister could say:
HMG committed to keeping adequate defence forces in Hong Kong. Garrison will be withdrawn carefully in stages: first battalion next year.
certain functions going smoothly.
-
Police take-over of
Believe 1988 Defence Costs Agreement satisfactory basis for finance of Hong Kong's defence.
(Defensive) Expect the three patrol craft to remain
in Hong Kong until 1997.
UK Trade Issues
I enclose notes on this subject prepared by the DTI in liaison with the British Trade Commission (Annex G):
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