TNAG-1156-FCO40-1436-Visits-by-FCO-Ministers-to-Hong-Kong-1982 — Page 133

CONFIDENTIAL

(ii)

(iii)

the Australian Government have deferred until February the decision on whether to buy the aircraft carrier HMS Invincible. Mr Fraser told the Prime Minister they needed time to prepare public opinion for the decision. But it still seems likely that the Australians will decide to buy.

the question of CAP continues to be a matter of considerable sensitivity in Australia, and affects EC-Australia relations generally. We have been encouraging both the Australians and our Community partners to avoid confrontation over the 2 issues of greatest current concern. Fortunately, on the manufacturing beef balance sheet (which allows imports into the EC at reduced or nil levy rates) the January Agriculture Council unexpectedly reached agreement on a figure of 60,000 tonnes for 1982 which is the minimum acceptable to Australia. And on

Australian safeguard action, under Apt 19 of the GATT, both sides have now agreed to continue

consultations with a view to agreeing a compensation package; this has avoided the need for the Community to formally threaten retaliation.

21 January 1982

cc:

CONFIDENTIAL

CP Burdess

South Pacific Department