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Sir Duncan Watson
SECRET UK-A
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HONG KONG: DEFENCE COSTS AGREEMENT
1. I attach two draft telegrams telling the Governor of the decisions taken by Ministers at the OPD meeting on 22 July,
together with some of the considerations which led them to that decision. The second telegram also seeks the Governor's views on timing of the proposed Ministerial visit.
2. I understand from the Ministry of Defence that Mr Rodgers has agreed to undertake this negotiation on behalf of HMG. He has apparently now gone on leave and several questions regarding negotiating tactics will remain outstanding until he returns. The most important of these is whether his own visit should be preceded by a meeting of officials designed to isolate any major differences between the two sides. (I do not expect there to be much difficulty over the size and composition of the garrison but clearly there is likely to be considerable disagreement over the proposition that Hong Kong should pay 75% from the outset of the new Agreement.) At all events, Mr Rodgers is anxious that only the Governor should at this stage be made aware that a Ministerial visit is in prospect; and there is nothing the Governor can tell UMELCO until we have Mr Rodgers' views on how we proceed from here.
3. The Cabinet Office, the Ministry of Defence, HM Treasury and Defence Department concur as appropriate.
31 July 1975
cc: PS
PS/Lord Goronwy-Roberts
Mr Wilford
Melleuth
PL O'Keeffe
Hong Kong & Indian Ocean Dept
SECRET UK-A
elegans despatched
Dan Walin
1/t
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