Confidential

NAC MINISTERIAL, 26 FEBRUARY:

SECRETARY OF STATE'S BILATERAL

WITH THE UNITED STATES' SECRETARY OF STATE

CHINA/MFN

Background

Embassy Washington report that US Administration believe that

unconditional renewal of MFN is a non-starter. The Governor

believes that it is too early in our lobbying effort to expose

our fallback position; but the Ambassador believes that it is

unrealistic to expect that Clinton can avoid applying conditions

to MFN, and that we must put down a marker to defend Hong Kong's interests. The line to take does not commit Hong Kong on the

substance, but puts a foot in the door.

Confidential

points.MFN.ADM.JRB

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