6.
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10.
On defence costs we have agreed a reduced
size for the garrison, and have negotiated a completely
new framework for cost-sharing and for land-use by
the Ministry of Defence which in all respects brings
arrangements for the garrison into line with modern
realities. It is certainly much more favourable
11.
than the previous defence costs agreement to HM,G,,
it has sufficient flexibility written into it to allow
it to last, and I sincerely hope it will end this
perennial source of friction. The price in local
resentment was significant but was well worth paying.
The problem presented by United Kingdom
resentment of industrial competition by Hong Kong has
been tackled within the rules of the GATT and its
multi-fibre textile agreement and within the negotiating
framework of the EEC. Considerable progress was
made this year through the agreement reached with the
EEC and in subsequent interpretive negotiations.
Approximately 80% of Hong Kong's exports to the United
Kingdom are now subject to restraint agreements.
have no doubt this will be a continuing problem,
with restrictions resented as deeply in Hong Kong as
competition in the United Kingdom, but it should be
manageable provided the rules are followed by both
follo
parties, as they were last year.
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