CONFIDENTIAL

(3)

055406 MDHIAN 5672

CONFIDENTIAL

FM WASHINGTON

TO IMMEDIATE FCO

TELNO 87

OF 150015Z JANUARY 93

REC

15 JA* 1992

INFO IMMEDIATE MOSCOW, UKDEL NATO

Lath

BONN, PARIS URMIS NEW YORK

INFO IMMEDIATE CAPE TOWN, PEKING, HONG KONG, KINGSTON, MODUK

SIC A2P

MEETING WITH CLINTON'S NATIONAL SECURITY ADVISER

1. TONY LAKE CAME TO BREAKFAST TODAY, PRIOR TO TAKING OVER AS NATIONAL SECURITY ADVISER ON 20 JANUARY. LAKE RECALLED OUR CLOSE COOPERATION OVER RHODESIA AND SAID THAT HE WANTED TO CONTINUE IN EXACTLY THE SAME WAY. I AM REPORTING SEPARATELY THE DISCUSSIONS ON YUGOSLAVIA, IRAQ AND NORTHERN IRELAND. THE FOLLOWING OTHER SUBJECTS WERE DISCUSSED:

FORMER SOVIET UNION

2. LAKE SAID THAT THIS WAS GOING TO BE A MAJOR HEADACHE. CLINTON WANTED TO TRY TO DO MORE TO SUPPORT YELTSIN IN THE DIFFICULT STRUGGLE GOING ON IN MOSCOW WITH THE MORE NATIONALIST FORCES THERE. BUT THERE WERE SERIOUS BUDGETARY PROBLEMS, PARTICULARLY AS MAJOR COST OVER-RUNS IN THE PENTAGON SHOWED THAT IT WAS GOING TO BE DIFFICULT IF NOT IMPOSSIBLE TO MAKE THE FURTHER DOLLARS SIXTY BILLION REDUCTIONS IN DEFENCE SPENDING ENVISAGED BY CLINTON DURING THE CAMPAIGN. CLINTON WILL APPOINT STROBE TALBOTT (WHO IS VERY WELL KNOWN TO US AND WAS A RHODES SCHOLAR AT OXFORD WITH CLINTON) AS THE CO-ORDINATOR OF ASSISTANCE TO THE FORMER SOVIET REPUBLICS. LAKE WAS WORRIED ABOUT THE OBVIOUS DESIRE OF THE UKRAINIANS TO TRY TO HOLD ONTO SOME NUCLEAR WEAPONS DESPITE PUBLIC STATEMENTS TO THE CONTRARY. THE NEW ADMINISTRATION WOULD WANT TO CONSULT CLOSELY WITH US ON THESE ISSUES.

CHINA/MFN/HONG KONG

3. I SAID THAT THIS WAS A MATTER OF VITAL INTEREST TO US. WOULD PREFER TO SEE MFN FOR CHINA UNCONDITIONALLY RENEWED. SAID THAT THIS WAS A NON-STARTER. THE CAMPAIGN THAT HE WANTED TO TRY HAD WITH CHINA OVER HUMAN RIGHTS.

WE

CLINTON HAD MADE CLEAR DURING TO USE WHAT LEVERAGE THE U.S. CHINA NOW HAD THE SECOND LARGEST

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