TNAG-0546-FCO40-641-Strength-of-garrison-in-Hong-Kong-1975 — Page 138

:

SECRET

SECRET

there remained the possibility that import restrictions might

}

be imposed upon Hong Kong. He had spoken to the Secretary of State for Trade about this and, although it seemed unlikely that Hong Kong would be affected by the measures that the UK Government was now considering, he had

been led to believe that the Department of Industry were

still pressing for certain Hong Kong imports to be included in the final package. If this should happen, the Hong Kong Government would regard the action as a breach of faith by

the UK Government and would consequently find it impossible

to accept the Defence Costs Agreement. He therefore wished

to postpone an announcement until it was known that Hong Kong would not be affected by import controls.

5.

The Minister of State said that he would find it exceptionally difficult to postpone an announcement. The Heads of Agreement

had explicitly provided for an announcement on or about

8 December. He was due to appear before a Select Committee

of the House on 9 December to give evidence on the negotiations and, while this could be done in confidence, he was coming

under increasing pressure in the House to make an announcement. Furthermore, an announcement was required to enable the MOD to initiate the release of land on 1 January 1976, in order to benefit from the Agreement. He would be prepared to minute the Prime Minister on the question of import controls immediately following the meeting, but he was most anxious that any delay

should not be taken as an opportunity to water down the Agreement by reference to the Executive Council.

6. The Governor replied that the text of the Agreement would remain sacrosanct once the meeting had concluded but it was very important, for prasentational reasons, to allow the

SEGRET

- 3

/Executive Council.