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believe, however, that there is much force in the Foreign and Commonwealth Secretary's arguments for an agreement of the longest possible duration. In my view we should certainly be prepared to agree to 7 years in the first instance, which is regarded as important by Hong Kong (as the Minister of State for Defence pointed out in his personal minute which was circulated on 6th November). But I would like to go a little further. My officials have discussed the matter with officials from the FCO and Treasury and a compromise has been proposed which I believe would preserve our essential interests while helping to make the agreement acceptable in Hong Kong. This is that the agreement shall run for a period of 7 years in the first instance and shall be renewed on the same terms for further periods of 5 years thereafter unless either Government gives notice a year before the end of each such period that it wishes to vary the terms. I propose, unless any of my colleagues dissents, that, provided all other matters are satisfactorily resolved, the Minister of State should be em- powered to settle matters on this basis when he meets the Governor on 4th December.
4. I am copying this minute to the other members of OPD and to Sir John Hunt.
25th November 1975
R.M.
SECRET UK EYES A
SECRET UK EYES A
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