TNAG-0543-FCO40-638-Strength-of-garrison-in-Hong-Kong-1975 — Page 106

SECRET

UK EYES A

12. After this plenary session it is expected that

negotiations will continue behind the scenes. The

Governor will take soundings to discover how far the

Executive Council and Finance Committee are prepared to

go to meet HMG's demands. There may be a series of

meetings between the Minister and the Governor or between

the Minister and groups of Unofficial members of the

Council and Committee. There may also be meetings between

UK officials and the Governor's official advisers,

13. If an agreement can be reached it will be embodied

in a Memorandum of Understandi ng. This has already been

drafted by officials of the two sides meeting in Londen

and is complete except for the vital details of the

composition of the garrison and the size of Hong Kong's

It includes a provision for

financial contribution.

inflation.

UK Negotiating Tactics

14. Our negotiating tactics will have to be reviewed

in the light of the reply to the Minister of State's

letter to the Chancellor of the Exchequer of 12 October

and of discussions on arrival in Hong Kong with the

Governor,

CBF and Mr. O'Keeffe of the FCO. At this

stage it is possible only to offer the following tentative

suggestions.

15.

The Minister's address to the Executive Council and

Finance Committee will provide an opportunity to describe

the UK's economic difficulties, the Defence Review leading

to the concentration of our limited resources on NATO

and the reduction of overseas garrisons, and the comparative

prosperity of Hong Kong which makes it appropriate for the

colony to make a larger contribution to its defence.

SECRET

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UK EYES A