FRIDAY, OCTOBER 10, 1980
DEFENCE COSTS AGREEMENT 1981
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THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE ARMY, MR BARNEY HAYMOE AND THE GOVERNOR OF HONG KONG, SIR MURRAY MACLEHOSE, HAVE CONCLUDED A NEW DEFENCE COSTS AGREEMENT, WHICH WILL REPLACE THE PRESENT AGREEMENT SIGNED IN 1975. IT WILL RUN FOR AN INITIAL PERIOD OF SEVEN YEARS. THEREAFTER IT WILL BE RENEWED ON THE SAME TERMS, OR ON OTHER TERMS AGREED BY THE TWO GOVERNMENTS, FOR A FURTHER PERIOD OR PERIODS OF FIVE YEARS. THE NEW AGREEMENT HAS BEEN THE SUBJECT OF DISCUSSION BETWEEN OFFICIALS OF THE TWO GOVERNMENTS OVER SEVERAL MONTHS.
IN THE NEW AGREEMENT THE BRITISH GOVERNMENT REAFFIRMS ITS COMMITMENT TO THE INTEGRITY AND SECURITY OF HONG KONG. A PERMANENT BRITISH GARRISON WILL CONTINUE TO BE STATIONED IN HONG KONG, AND THE BRITISH GOVERNMENT HAS AGREED TO THE ENLARGEMENT OF THAT GARRISON BY ONE ADDITIONAL INFANTRY BATTALION AND CERTAIN OTHER SMALLER ELEMENTS. THE BRITISH GOVERNMENT HAS CONFIRMED THAT IT WILL CONTINUE TO USE ITS BEST ENDEAVOURS TO PROVIDE TEMPORARY REINFORCEMENTS TO THE GARRISON WHERE BOTH GOVERNMENTS AGREE THAT THEY ARE APPROPRIATE AND NECESSARY.
UNDER THE NEW AGREEMENT THE HONG KONG GOVERNMENT WILL CONTINUE TO MAKE A FINANCIAL CONTRIBUTION OF 75 PER CENT TO THE COST OF THE GARRISON. A NEW BASIS OF COSTING HAS BEEN DEVELOPED TO ENSURE THAT THE JOINT CONTRIBUTIONS OF THE TWO GOVERNMENTS REALISTICALLY COVER THE ACTUAL COST OF THE GARRISON. THIS NEW BASIS OF COSTING AND THE ENLARGEMENT OF THE GARRISON WILL MEAN THAT THE HONG KONG GOVERNMENT'S CONTRIBUTION WILL BE SUBSTANTIALLY LARGER. SINCE CONTRIBUTIONS WILL IN FUTURE BE BASED ON ACTUAL COSTS, IT IS IMPOSSIBLE TO GIVE AN EXACT FORECAST OF COST TO THE HONG KONG GOVERNMENT OF THE GARRISON ON THE FIRST YEAR OF THE NEW AGREEMENT (1981-82), BUT ACCORDING TO PRESENT ESTIMATES IT IS EXPECTED TO BE ABOUT 120 MILLION POUNDS. THIS FIGURE WOULD REPRESENT AN INCREASE OF RATHER MORE THAN 50 PER CENT OVER WHAT WOULD HAVE BEEN THE COST OF THE GARRISON AS COMPUTED UNDER THE OLD AND LESS COMPREHENSIVE METHOD.
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EXTERNAL TRADE PRICE AND VOLUME MOVEMENTS
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THE PRICES OF DOMESTIC EXPORTS AND IMPORTS ROSE BY 9 PER CENT AND 8 PER CENT RESPECTIVELY IN JULY 1980 COMPARED WITH THE SAME MONTH LAST YEAR, ACCORDING TO STATISTICS RELEASED TODAY BY THE CENSUS AND STATISTICS DEPARTMENT.
THE TERMS OF TRADE INDEX (EXPRESSED AS A RATIO OF DOMESTIC EXPORT PRICE INDEX TO IMPORT PRICE INDEX) IMPROVED SLIGHTLY BY 1 PER CENT. HOWEVER, A MUCH LARGER INCREASE IN VOLUME WAS REGISTERED FOR IMPORTS (+ 13%) THAN FOR DOMESTIC EXPORTS (+ 8%). ON THE OTHER HAND, THE PRICES OF RE-EXPORTS INCREASED BY 7 PER CENT, WITH VOLUME UP BY 37 PER CENT.
/PRICES ARE