CONFIDENTIAL

4.

Mr Moss's paper also raises the issue of converting the existing understanding between the UK and Hong Kong on air This is part of services into a UK/Hong Kong ASA in 1997.

the wider question of UK/Hong Kong bilateral agreements. Constitutionally Hong Kong cannot now sign an international treaty with the UK, and so the most that can be set up now are arrangements. We would like these to be replaced from 1 The Chinese may

July 1997 by full international agreements. not accept that the Hong Kong Government could be trusted to

They might negotiate on behalf of the SARG with the UK. fear that we would instruct Hong Kong to agree a treaty favourable to the UK. That is an area which will have to be tackled in the JLG in due course.

RiZcbeth

PF Ricketts

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